EUA Dec15: Hesitating in the range defined on the day of the ITRE vote

2015-02-09 08:09
The EUA Dec15 opened above the 30DMA at 7.13 euro on Monday and maintained its strength during the whole day. Tuesday was characterized by a continuous fall from the market open, but the benchmark contract managed to close at the 30DMA at 7.13 euro.

DMAs were broken in Wednesday’s sell-off and the price fell below 7 euro again. It only climbed back to the psychologically important level of 7 euro by the end of the trading session. The decline extended on Thursday and was enough for the MACD to cross the signal curve and to fall below zero.

The price couldn't even retest the MDAs on Friday, but fell further, Today's open brought a new local low again.

All in all, the benchmark contract seems to trade in the lower edge of the daily range from the 22nd January (the day of the vote in the industry committee), 6.81 and 7.55 euro. 

The RSI is in the neutral territory reflecting the hesitation of the benchmark contract about which direction to take. 

The first support can be found at 6.80 euro, the lower edge of the range mentioned above. The lower Bollinger band is at 6.72 euro and there is a local low from 7th January at 6.68 euro.

To the upside the resistance levels to test first are the moving averages. The 30DMA at 7.08 euro and the 20DMA at 7.11 euro. There resistance levels are followed by 7.25 euro, last week's high.

The 7.55 euro, the high from the day of the ITRE vote could be only retested in our opinion, if discussions in the ENVI committee on Wednesday lead to compromise amendments about the MSR design.

Source: Bloomberg Finance L.P.

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