After more than a month of strong upward momentum, the EUA has now reached a level at which further accumulation of long positions has become too risky. The market has tested levels above EUR 84 several times, but the buying pressure eased at this point, allowing sellers to take control. Just one week later, EUA is now trading 10 EUR lower and just below 75 EUR for the December 2025 futures contract.

It seems that investment funds have built up their long positions too quickly and a change in fundamentals has triggered a sharp fall in prices. According to the latest CoT report, which publishes Friday's positions, investors still hold over 58 million tonnes of emission allowances. However, this figure is likely to have already decreased due to market developments in recent days. Moreover, sentiment has gradually shifted from bullish to bearish, and related markets have also followed suit.

Geopolitical events over the past week have also contributed to a more risk-averse market sentiment. High-level political representatives from the US and Russia met in Saudi Arabia to discuss a possible ceasefire in Ukraine and the lifting of sanctions. Such developments could at least partially ease the pressure on commodity prices and strengthen trade.

Another key event that market participants are watching closely is the German parliamentary election on Sunday. According to current polls, the CDU/CSU is still expected to win, with the AfD in second place. However, an unexpected result could cause further volatility and potentially bring additional downside risks to the market.