Monday, June 9, 2014

EUA Dec14: Healthy demand pulled the price above the 200DMA

The EUA Dec14 appreciated 7.5% last week. After the moderate volumes and volatility in the last week of May, average daily volumes increased to 17-18 million and the price moved within a wide range of 4.93 and 5.63 euro. 

Despite falling below 5 euro during the day, Monday’s close above the 20DMA was a promising sign. The benchmark contract started Tuesday from the 30DMA and rallied further to close 14 cents above the 200DMA. The price appreciated further on Wednesday and this helped the MACD to climb into positive territory (first time since mid-March), but market participants decided for a profit taking in the afternoon, leaving a doji-like candle in the chart. The price appreciation that started in the first half of the week continued on Thursday and the price hit a daily high at 5.60 euro, a level not seen since 25 April. The benchmark contract climbed further in Friday’s opening, but the auction clearing price that came in lower than the secondary market price pushed the EUA Dec14 below 5.50 euro.

The moving averages will serve as support for the price: 200DMA at 5.36 euro, 30DMA at 5.23 euro and 20DMA at 5.19 euro.

If the rise in the price continues this week, the first resistance will be at 5.92 euro (the high from 24 April), followed by 6 euro (a Fibo level). 

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