Last week, EUAs registered their fourth weekly gain, following a spike, on Friday, in the price of Dutch TTF, and another reduction of investment funds’ net short positions.

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Auction volume: 11.6 million EUAs, 0.4 million less than last week.

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This week, we expect EUAs to slightly continue their increase, still keeping in line with the movements of Dutch TTF, particularly since there is no major news on the horizon. Furthermore, as this is a shorter trading week, we predict increased volatility towards its end, as market participants might close a significant number of positions ahead of the 4-day weekend. Consequently, we anticipate a sideways to bullish trajectory.

On March 21, gas storage stood at 57.74% full, marking a slight increase from 55.20% in 2023. Unseasonably warm weather is forecasted for the next fortnight across continental Europe. The market will be closed on Good Friday and Easter Monday. EUAs continue to mirror TTF Front Month movements. The Tyra gas field in the North Sea, Denmark, has resumed production. French power prices have plummeted to a new three-year low, attributed to subdued demand and the strong performance of the nation's nuclear fleet.

Technical Analysis

Presently, EUAs are at the upper boundary of the uptrend channel, coinciding with a 100% retracement. This juncture presents two potential scenarios: a retreat to 58.72, aligning with the channel's lower limit. Taking a broader perspective since the year's onset, should today's prices surpass 62.989 (Upper Bollinger Bands level) at close, a retracement towards 66.25, marking the 50% level, and potentially aiming for 70, becomes plausible. Confirmation of an upward trend is coming from both FSI and RSI indicators.

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AFS ENERGY B.V.

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