Barclays (LON: BARC) share price is having a minor pullback today after a strong bounce. The shares of the banking giant rebounded from the monthly lows and are currently up more than 5%. Further upside depends on the stock’s ability to reclaim a key level which we will discuss in this article.
The shares of major UK companies have shown notable recoveries this week. This can be attributed to a bounce in FTSE 100 index, which is once again trading above its 7,300 resistance level. After a surge at the start of the week, Barclays shares slid 0.12% on Wednesday. At the afternoon, the shares were changing hands at 154.5p.
According to the latest reports, Barclays is planning to inject capital into smaller businesses in order to improve its stock value. These businesses include the US credit card and global payments units. There is also a possibility of layoffs in the coming months, as the CEO is seeking advice from Boston Consulting Group.
While the inflation in the US has hit its lowest level in 2 years, the UK inflation remains elevated. This is the biggest headwind for Barclays share price, which is already trading 20% below its yearly high. While high interest rates have boosted bank profits, it has also created some systematic risks in the banking industry.
It can be seen in the following LON: BARC chart that the shares are currently retesting the midpoint of the trading range. As repeatedly mentioned in my previous forecasts, the shares have been trading within the 140p-178p region for more than 12 months.
Barclays share price may have a nice rally if it breaks above 158p resistance. In this scenario, bulls may target the range of highs that lie around 178p. However, a lot depends on the strength of the UK economy, as a recession would be destructive for the bank shares.
In the meantime, I’ll keep sharing updated Barclays stock forecast and my personal trades on my Twitter where you are welcome to follow me.
This post was last modified on Jul 13, 2023, 12:29 BST 12:29