EU ETS | February 2025 Overview

The first week of February was bearish, with a -1.97% variation compared to Friday, January 31st. However, this was mainly due to a sharp price drop on Monday, February 3rd, which impacted the rest of the week. Prices then recovered during the remaining days, showing a renewed upward trend. On Monday, February 3rd, the EUA DEC25 lost over €3, reaching lows of €80.10/ton after hitting highs of €84.44 in the previous session. Even lower prices were recorded during Tuesday’s session (€79.48/ton), after which the front-year contract started rising again. However, EUA allowances failed to fully recover the lost ground and showed some indecision toward the end of the week. The support level of around €79.50/ton remained strong and was reconfirmed. There was some uncertainty in technical indicators: in the medium term, the MACD had turned bearish on February 3rd but seemed likely to start sending bullish signals again soon. However, the stochastic remained bullish in the short term, while the RSI was not in the overbought area, leaving further room for growth. In fact, that morning, the EUA broke above €84/ton again.

In the second week of February, from the 10th to the 25th, the DEC25 contract lost over 3% compared to Friday, February 7, driven by substantial sell-offs in the TTF market, which also pulled EUA prices down. These sales followed the apparent ‘easing’ of Russia/Ukraine tensions and statements regarding the Trump/Putin talks on the matter. The real downturn occurred between Wednesday and Thursday, with prices dropping to as low as €78.05/ton, marking a 5.90% decline from the start of the week. Thursday, in particular, was characterized by high trading volumes (43,482 allowances traded), a clear signal of bearish pressure. On Friday, February 14th, however, the market showed early signs of recovery, with a price rebound of €1.70/ton (+2.18%), closing the day at €79.75/ton. Trading volumes decreased compared to Thursday, suggesting a potential pause in the selling phase. The rebound on Friday, February 14th, could have indicated the formation of an initial support level in the €77-78/ton range. A consolidation phase could have followed if the market held this level before any potential recovery. Otherwise, further bearish pressure could have pushed prices toward €75/ton.

The third week of February was marked by a steady price decline for the EUA DEC25, with the market experiencing a progressive loss of value from Monday to Thursday. On a weekly basis, the market faced a depreciation of 7.34%. After opening on Monday, the 17th, at €79.88, the futures contract saw a continuous drop, reaching a weekly low of €72.26 on Thursday. Trading volumes were particularly high on Tuesday and Thursday, indicating strong activity among market participants. At the same time, Friday saw a slight rebound with an intraday high of €74.90 and a settlement at €73.90, though with declining volumes. From a technical perspective, the market was in an unusual situation, with prices breaking through the lower Bollinger Band in several sessions, an event with a probability of occurring below 3%. This could have indicated a potential rebound in the coming days, especially if relevant news had emerged regarding the U.S./Russia/Ukraine negotiations. Short sellers needed to proceed with caution, as a sudden reversal could have triggered rapid short-covering. A very strong support level was located around €71.90/ton, where the lower Bollinger Band, the 100- and 200-day moving averages, and a Fibonacci retracement (61.8%) converged. The main resistance remained far off, around €79.60/ton.

The last week of the month saw volatile movements for the EUA DEC25 contract, with the market showing signs of uncertainty and a predominantly bearish trend. On a weekly basis, the price declined by 3.92%. After opening on Monday, the 24th, at €74.62/ton, the price gradually dropped, reaching a weekly low of €70.69/ton on Wednesday. The recovery attempt between Thursday and Friday was not enough to bring prices back to the levels seen at the beginning of the week, closing at €71.00/ton. From a technical standpoint, the test of the €70.69/ton level could have acted as a potential support for the market, although the weekly close at €71.00/ton had not yet confirmed a true trend reversal. Intraday volatility remained high, with significant fluctuations between daily highs and lows, indicating that the market was still uncertain about its direction. Regarding resistance levels, the first upward barrier was in the €73.50-74.00/ton range, while the key support remained around €70.50/ton. The market seemed to be awaiting macroeconomic developments or new regulatory drivers before taking a clearer direction.