Barclays Share Price is at a Crossroad. Where Will it Go Next?

Summary:
• The Barclays share price hit a major resistance as investors reflect on this week’s economic data from the UK. What next for BARC?

The Barclays share price hit a major resistance as investors reflect on this week’s economic data from the UK. BARC shares rose to a high of 173.22p, which was the highest point since June 6th. It has risen by about 16% from the lowest level in July of this year. Other banks like Lloyds and Natwest have also recovered.

Hawkish Bank of England

Barclays share price pulled back as investors focus on the latest UK consumer price index (CPI) data from the UK. According to the Office of National Statistics (ONS), the headline inflation rose to 10.1% in July, which was higher than the previous month’s 9.4%. It was a bigger increase than what analysts were expecting.

The core consumer inflation rose from 5.8% to 6.2%, which was higher than the median estimate of 5.9%. It was also bigger than the median estimate of 5.9%. Therefore, analysts expect that the Bank of England (BoE) will continue hiking interest rates in the coming months. As a result, this increase will likely lead to higher profits.

In July, the company published mixed earnings. Its attributed profit rose to 2.5 billion pounds as its income rose by 10%. While its investment banking division declined in the quarter, higher interest rates helped to offset these losses. It was also in a strong capital position as the CET1 ratio rose to 13.6%. In the second quarter, the company made 60% of its income from its wholesale division and 40% in consumer.

Barclays share price forecast

The four-hour chart shows that the BARC stock price has been in a strong bullish trend in the past few weeks. The stock rose to a high of 173.22p, which was the highest point since June 6. It has formed what looks like a double-top pattern, which is usually a bullish sign. The shares have risen above the 25-day and 50-day moving averages. They are also below the 38.2% Fibonacci Retracement level.

Therefore, the outlook for the stock is neutral at this point. A move above the resistance level at 173.22p will signal that there are still more buyers in the near term. As such, the stock will likely rise to the 50% Fibonacci Retracement level at 180p. On the flip side, a drop below the support at 162.2p will invalidate the bullish view.