Last week, EUAs registered a gain of 7%, following a similar price movement to Dutch TTF. They reached a four-month high on Thursday, followed by a lower settlement on Friday.

Auction volume: 8 million EUAs, 5.4 million less than last week.

Looking ahead, one possible scenario is that EUAs will continue trading in a sideways to upward range, as the weather forecast shows that we might be moving into one of the hottest summers in EU history. This could add to the positive price momentum as demand for air conditioning and cooling is set to grow. However, investment funds are seen rebuilding their short positions, signalling caution in our expectations for further upside movement for EUAs.

Gas storage sits at 68.5% full on May 25, compared to 67.1% on May 25, 2023. Warmer-than-normal weather is expected across Europe in the next two weeks. Pipeline operators in Poland and Russia agreed on a solution that would allow Kazakh oil transit to Germany to continue. The US is assuring Europe that they will continue to send gas. The gas pumping through Nord Stream has been fully suspended. The German economy has recovered slightly. EUAs are following the TTF movement.

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‍Technical Analysis

Analysing the technical aspects, the price has broken out of the Ascending Triangle pattern, which typically signals a continuation of the uptrend. The next significant resistance level is around 80 EUR, a notable psychological barrier. However, the presence of reversal candlesticks on both Thursday and Friday, confirmed by the FSI, suggests a potential shift. For a bearish trend to take hold, the price would need to drop below 74.25 EUR and 72.5 EUR, potentially reaching 69.75 EUR, though this scenario appears less likely.

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