Friday, May 31, 2013

EUA Dec13: MACD climbed into positive territory first time since EP vote

After trading in a range of EUR 3-4 for almost a month, the EUA Dec13 shortly visited today levels above EUR 4. The MACD climbed into positive territory for the first time since April 16, the day when the European Parliament rejected back-loading.

The price appreciation started last Thursday and after a short correction this Monday it continued until now. The EUR 4 level has been tested May 6 already, but that time the price couldn't break it. Today the price hit a daily high at EUR 4.08, but couldn't maintain its gains and pulled back to EUR 3.92 in the afternoon. It is also a 61.8% Fibonacci retracement level.

The EUA Dec13 appreciated 27.5% since last Thursday from its local low at EUR 3.20. Although the RSI at 57.4 is far from overbought territory, the rally of the recent days might be a little bit overdone. Retesting the former resistance level at EUR 3.85 is therefore very likely.

Optimism (speculation?) about the ENVI supporting the back-loading on June 19 on the other hand might attract more buyers. If the price breaks the EUR 4 level definitely, the EUA Dec13 could find its next resistance at EUR 5. It fell from this level on the rejection of the back-loading by the Parliament plenary.

Wednesday, May 22, 2013

EUA Dec13 broke out downwards

With prices moving sideways in the last 4-5 days, the 20- and 30-days moving averages came closer to each other and are now at almost the same level (EUR 3.44 and EUR 3.46, respectively).
The EUA Dec13 closed three times above the 30-days moving average, but couldn't brake over EUR 4.00.

Despite a relatively strong result of today's UK auction (clearing price some 3 cents above the best bid and bid to cover ratio at highest in the last three months) the price couldn't resist the temptation of the deep and plummeted to a daily low of EUR 3.30 breaking the support level at EUR 3.45.

Besides technical trading there was only one article about the European Council discussing 2030 climate goals in March 2014. The delayed decision might have suggested to market participants that politicians are divided on climate topics which is not the best sign for back-loading to be voted about this summer.

With today's movement the price broke also the trend line that started April 17 at EUR 2.46 and linked that minimum to the local low at EUR 2.86 from May 1. The way is open now to these levels that will work as support.

The first resistance level is at EUR 4.00.

Tuesday, May 14, 2013

EUA Dec13: Captive of the moving averages

The little pattern we observed the last days seems to work perfectly. The EUA Dec13 is moving between the 20-days and 30-days moving averages. Today's low was EUR 3.28, just 2 cents above the 20-days moving average.

This level proved a strong support level until now, but was tested five times already.

Technical analysts say the more a level gets tested the weaker it becomes. We would be therefore careful with opening new long positions and strongly suggest putting a stop-loss.

If the 20-days moving average as support level breaks, the price might fall to EUR 3.

Monday, May 13, 2013

EUA Dec13: Oscillating between two moving averages

As we wrote in our last blog entry the EUA Dec13 has found support at the 20-day moving average and a resistance at the 30-day moving average.
This pattern was confirmed by the recent days' trading and can be used to open speculative positions with a narrow stop-loss.

Thursday, May 9, 2013

EUA Dec13: The German Chancellor widened the trading range

Carbon traded without major excitement between the EUR 2.46 and EUR 3.53 Fibonacci retracement levels until last Friday, when the German Chancellor Angela Merkel used a church event to make her opinion about EU ETS public. As a reaction the EUA Dec13 jumped more than 22% within a day from EUR 3.09 to EUR 3.78 and went above the 20-day moving average at EUR 3.58.

Since then the price trades between the 20- and 30-day moving averages. Latter stopped the EUA Dec13 from increasing on Monday and on Tuesday. The first one halted a decline yesterday and today.

Resistance levels can be found at EUR 3.87 (30DMA, Fibonacci retracement level), EUR 4.20 (Fibonacci retreacement level), EUR 4.50 (former local low) and EUR 5. For another significant price increase, however, we would need important news (or considered by the market as such) like that from the German Chancellor. At the moment the likelihood for this to happen is very low.

The first support level is the 20DMA (tested already twice), the EUR 3.12 Fibonacci retracement level and the historical low at EUR 2.46.

Without news giving the price major boost, the most likely scenario is that the price moves in a range of EUR 3.00-4.00 in the coming days.