Lloyds Bank Share Price Hits Ten-Week Highs With More Upside Momentum to Spare

Summary:
• Lloyds Bank share price bulls have a field day with the UK monthly consumer inflation falling to the lowest level since April 2021.

Lloyds Banking Group (LSE: LLOY) share price edged up on Wednesday, with markets reacting to soft UK consumer inflation date. LLOY traded at GBX 60.30, having gained 0.3 percent on the daily chart at the time of writing. The bullish momentum sent the stock to GBX 60.62, its highest level in ten weeks, before easing downward during the intraday session.

Key movers: Inflation and earnings sentiment

The UK Office for National Statistics reported that headline inflation declined year-over-year to 1.7 percent in September from August’s 2.2 percent, and more than analysts’ median forecast of 1.9 percent. In addition, the core Consumer Price Index (excluding food and energy prices) came in at 3.2 percent, lower than the forecast rate of 3.4 percent.

It is the first time that the UK’s monthly headline inflation rate has fallen below 2 percent since April 2021. Furthermore, that figure is well below the Bank of England’s (BoE) target rate of 2 percent, and substantially raises the prospect of rate cuts in the central bank’s remaining two Monetary Policy Committee (MPC) meetings.

A low interest rate regime augurs well for Lloyds Bank share price as it will likely encourage borrowing and spur commercial and industrial activities. The LSE’s benchmark FTSE 100 index rose by 0.7 percent in the aftermath of the CPI figures release.

Lloyds Bank share price also gets tailwinds from its forthcoming earnings release which is only a week away. The bank beat forecast estimate earnings in the last two quarters, and is expected to repeat the same in the fiscal third quarter with earnings of £4.6 billion.

Lloyds Bank share price prediction

The bulls are in control of the Lloyds Bank share price momentum, and the upside will likely prevail if the action stays above 60.08. That could encounter the first barrier at 60.64, but a stronger momentum could break above that level to test 61.00.

Alternatively, moving below 60.08 will favour the sellers to take control. In that case, the first support will likely come at 59.58. However, if the sellers extend their control, it could enable them to breach the first support and effectively render the upside narrative invalid. Meanwhile, the decline could extend to the second support at 59.08.