$EUA : Blue box bounce for carbon prices expected

Carbon Prices Weekly Elliott Wave Analysis 03.24.2020

Weekly Chart of $EUA Futures above shows a cycle up in red wave 1 of a cycle degree from April 2013 lows which has printed a top on July 2019 at 30 € / t CO2. One can recognize the cycle internals as 5–3–5–3–5 impulsive Elliott Wave structure with an extension in the black wave ((3)). Even though rare within the same cycle, both the waves ((1)) and ((5)) apear to unfold as diagonal structures.

Carbon Prices Outlook

As for now, the extension in black wave (©) has already reached the equal legs area with the black wave ((A)) at 16.6–12.0. From the blue box area (s. chart), where the buyers are expected to enter the market, the price is expected to bounce to resume the rally to the new highs above 30 € towards 40–45 € area. If the bounce would, however, fail in 3 waves, another low in a double three pattern may happen. Since the correction lower has already retraced more than 50% of the cycle up, a double three is less probable.

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