(Reuters) - European carbon emissions futures rose over 2 percent as German power firmed, signaling the start of an upward breakout of a bullish symmetrical wedge pattern, traders said.

EU Allowances for December delivery rose 35 cents or 2.3 percent to 15.57 euros ($20.89) a tonne at 1352 GMT, with volume at 6,689 lots traded.

A German spot EUA auction settled at 15.12 euros a tonne on Tuesday.

Dec-10 certified emissions reductions (CERs) gained 34 cents or 2.70 percent to 12.92 euros a tonne, setting the EUA-CER spread at 2.65 euros.

Traders said the impact of jittery financial markets had worn off and prices were being supported by firm German power.

In addition, the climate spread, or the margin between burning coal versus gas including the cost of carbon, is in positive territory, making coal cheaper to burn than gas.

This is bullish for carbon as increased electricity generation from coal raises EUA demand.

A close above 15.43 euros could indicate the start of an upwards breakout of the bullish symmetrical wedge pattern.

A technicals expert last week said that such a breakout, founded on strong volumes and a jump in open interest, could push Dec-10 EUA prices up as high as 18.60 euros by the end of June.

BULLISH END

"For the coming week we think the carbon market will continue to be relatively cut off from the macro evolution even if the still very bad macro sentiment overall creates a downside risk," said SocGen/orbeo analyst Emmanuel Fages in a note.

A UK auction of 4.4 million EUAs on Thursday could bring a relatively bullish end to the week as utilities come back to market and secure some volumes, Fages said.

Renewed worries about European sovereign debt, this time Britain's, knocked equities back on Tuesday and ate into early euro gains against the dollar.

Oil hovered around $71 a barrel on Tuesday, while German Calendar 2011 baseload power on the EEX was up 24 cents or 0.44 percent at 54.50 euros per megawatt hour.

The options market was relatively quiet in the past week, with a 250,000 tonne CER trade last Thursday constituting the only transaction, said Bache Commodities.

There could be more plays this week prior to the UK auction. but large positions will not be taken until the very end of the week, the traders said in a note.

On June 21, a U.N. panel is due to discuss changes to its methodology for hydrofluorocarbon (HFC) destruction projects, which could impact future CER issuance.

Some traders said speculation over this issue has made CER spreads for 2010-2011 and 2010-2012 widen over the past week but others attributed this to the rolling of hedges from 2010 into 2011 and 2012 due to continued delays in CER issuance.