EUA Dec20: 1% loss in February as market prepares for more auction supply
The benchmark carbon contract lost 1.1% in February as the market participants prepare for a higher supply from March due to the restarting British auctions. Investors are also keeping an eye on the fast spreading coronavirus and its effects on the economy.
The price was range bound between 23 and 27 euro since mid-October with some false break-outs. As the fundamental risks (high supply, decarbonisation of the power sector, coronavirus) remain, the price could break down from the lower edge of the range and test the October low at 22.26 euro. With the RSI around 40, there is still room for that.
In a positive scenario, the first resistances will be the 20 and 30DMAs followed by the 200DMA.