At the same time EPP, the biggest political group in the European Parliament is still split about the parameters of the reform. Other fact that can make buyers hesitating.
After losing more than 5% the week before the EUA Dec15 continued its downward path last Monday when it fell below the 20 and 30DMAs and visited shortly levels below 7 euro. By the end of the day it still managed to climb back above the key psychological level which was not the case on Tuesday when the benchmark contract closed at 6.86. The price reached its weekly low on Wednesday at 6.68 euro, but climbed back above the Fibonacci level at 6.79 euro and closed at 6.87, 1 cent higher than the day before.
Wednesday’s hammer and Thursday’s doji are both indications for the price looking for a bottom.
The MACD however crossed the zero line on Friday which is a bearish signal. The RSI at 37 still leaves room for further depreciation.
The closest support was the low from last week at 6.68 euro which was just broken today in the morning. The following support can be found at 6.55 euro, the daily low from 10th December.
To the upside the first resistance is a psycological one at 7 euro, but this is also close to the 30DMA (at 7.03 euro) and 20DMA (at 7.09 euro).
Our base range for this week is therefore 6.55-7.00 euro. This can be easily overwritten however by government representatives who meet on 13th January (Tuesday) to discuss the MSR. The countries with no official position about the proposal yet, but with a significant number of votes in the Parliament are Spain and the Czech Republic. If any of them comes up with a support or rejection of the MSR, it can move the price out from the band mentioned above.