The benchmark contract took a break and consolidated in a narrow range between 6.80 and 7.00 euro on the first two days of last week. Appreciating German power and a revised EUA price forecast helped the benchmark contract overcome the psychologically important 7.00 euro resistance level on Wednesday and the closing price was 2 cent above this resistance which worked as support on the next day.
The sideways move brought the MACD close to the zero line, but a cross didn’t happen last week, only today in the morning helped by the appreciating German front year power.
Today's opening above the 30DMA (at 7.13 euro) is a positive sign. The 20 and 30DMAs (at 7.06 and 7.13 euro, respectively) will be the first support for the price. The strongest support however still seems to be at 6.80 euro.
Shadow rapporteurs in the ENVI committee are expected to discuss the MSR on Tuesday, and the Council continues negotiations about the reserve on Friday. Any positive message from these meetings could help the price in testing resistance levels. The first one being at the daily high of the 22nd January at 7.55 euro, followed by the 2014 high at 7.66 euro.
Source: Bloomberg Finance L.P.