Carbon Prices: Key Levels and Technical Outlook for Traders

Carbon trading has garnered renewed attention as traders assess the possibility of a breakout on the weekly chart. Despite this optimism, caution remains essential as carbon prices continue to face technical resistance and fluctuating market sentiment.

Current Price and Recent Trends

As of now, the price of carbon is trading at approximately €72.21 per tonne, recovering from a low of €53.07 per tonne in February 2024. In December, carbon prices broke above the ascending trendline that had acted as long-term technical resistance since March 2023. This breakout marked a shift in market sentiment after a bearish trend throughout 2024.

Following this significant move, prices are now approaching the 200-day moving average (200MA), which currently acts as near-term resistance. Profit-taking by traders may also contribute to the current consolidation phase.

Key Technical Indicators

The Stochastic oscillator, a popular technical indicator, suggests caution as it approaches overbought territory. This has likely prompted some traders to lock in gains after the recent rally. Despite this, market sentiment appears to have shifted towards a more neutral stance compared to the bearish outlook seen last year.

Upside Potential: €80 per Tonne in Sight?

A sustained move above the 200MA could spark increased bullish momentum. In this scenario, the next key target for traders would likely be the €80 per tonne level. This price point aligns with the 100-day moving average (100MA) and corresponds to the May 2023 highs, making it a critical resistance level to watch.

Downside Risks: Support Levels to Monitor

On the downside, the €67-€70 range, highlighted as a green channel on the charts, is expected to provide medium-term support. If prices fail to hold within this range, selling pressure could intensify, potentially driving prices back towards the €60 per tonne level.