Tuesday, April 18, 2017

EUA Dec17: Consolidation near the 5 euro level

In a short week before the Easter holidays, the EUA Dec17 gained 1.2%.

Thanks to a strong auction the price of the EUA Dec17 remained stable for most of Monday’s trading session. In the last 10 minutes of trading, however, the price turned sharply lower and finished the day one cent above its daily minimum, at 4.79 euro, with a loss of 10 cents from previous Friday’s settlement (-2.0% d/d).

Despite some intra-day volatility, the benchmark carbon contract remained within its comfort zone on Tuesday. After opening at Monday’s settlement, the price turned higher and reached 4.90 euro. The price then turned lower after noon. Reversing the pattern of the previous two days, bulls lifted the price in the last hour of trading to a new intra-day maximum at 4.92 euro. The closing price was just 5 cents below this level

The EUA Dec17 climbed higher step by step on Wednesday to hit an intra-day maximum at 5.04 euro in the afternoon. The benchmark carbon contract was not able to keep all its gains and finished below the 5.00 euro level. The closing price still represents a gain of 1.2% from Thursday’s settlement price. On the positive note, the price closed above the 20DMA.

In an Easter holiday mood, the benchmark carbon price moved in a narrow range of 11 cents on Thursday. The price opened at Wednesday’s settlement price and lost just one cent before climbing to an intra-day maximum at 5.03 euro. Gains however could not be kept by the end of trading and the price closed at 4.95 euro, a gain of 2 cents from Wednesday.

Technical indicators of the EUA Dec17 chart send a neutral signal. The relative strength index is in neutral territory (at 50). The MACD is approaching very slowly the zero line, but is still in the negative territory. The Bollinger bands narrowed, but the price closed at the mid band.

Although there is a slow increasing trend in the price since the last week of March, the price seems rather to consolidate between 4.60 and 5.30 euro. This range might keep the price this week as well.
 
 Source: Bloomberg, ICE

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