Looking at the chart of the front year German power contract we can find some sign of revival:
- The two candles from 28th and 31st of March form a tweezer bottom together the second candle being a short white one with the same low as that from the 28th.
- The dragonfly doji from the 3rd of April shows that market is hesitating and looking fo direction. The previous downward trend might brake.
Next day didn't confirm the trend reversal, but two days later the contract closed above 34 euro/ MWh.
The MACD is deep in the negative territory, but in the last couple of days it approached the signal line and a bullish crossover cannot be rolled out, but the increase is still fragile.
The RSI spent seven days below the 30 level (marking oversold prices) and returned to normal levels (33) yesterday.
Energy was, is and will be a huge topic for Europe's biggest economy. The way of the renewable transition leads through some mounds. After the financial crisis the protection of the industry became a priority and the decision taken recently that eases (or doesn't increase) the burdens of energy intensive companies shows that industry will be protected, no matter how much and what kind of energy they use.
The first resistance to break will be the 35 euro level. In a negative scenario the price would have to brake the low at 33.65 euro reached last Thursday.