Week 20: Full EUA auction volume returns

After the supply pause, next week is doubling the auction supply as normal auction schedule will resume. Solid European gas storage and ample supply has led to gas prices at levels not seen since June 2021 and with fuel switching running full speed this could put a lid on the gains. Solid renewable production could also limit the need for fossil fuel power generation and demand for EUAs. That said, some optimism could come from the wider financial markets if there is an agreement to raise the US debt ceiling. A break above the 50-day moving average and upper Bollinger band could turn the technical outlook from sideways to bullish.

Overall, on mixed signals we have a neutral view for the week ahead.