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Royal Mail Share Price Opens Lower As FTSE Sheds 81 Points

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Written By: Abdullah Sarwar
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    Summary:
  • Royal Mail Share Price Forecast - LON: IDS is losing momentum after breaking above a key trendline. A breakdown might take it back to 252p.

Royal Mail (LON: IDS) share price has been consolidating for the last few weeks after the mail distributor’s share price rallied 20% last month. At press time, the shares were changing hands at 264p, down 1.49% down for the day.

The FTSE 100 opened lower on Friday, down 0.75% till press time. The UK investors reacted to the news of a surprise 0.2% GDP growth in the UK economy in the second quarter. The stronger-than-expected growth data increased the likelihood of further interest rate hikes from the Bank of England (BOE), which could weigh on stock prices.

Royal Mail Strikes Deal With Union Over Pay and Working Conditions

International Distribution Services and the Communication Workers Union (CWU) reached a pay and working conditions deal in April, which would see Royal Mail staff receive a 10% pay rise and a £500 one-off payment. The strikes have since been called off, and the British mailing company is now on track to recover its losses.

In other news, Peel Hunt upgraded International Distributions Services (IDS) from a sell rating to a hold rating. The leading investment bank also increased its Royal Mail share price target to 2.60 pounds sterling from 1.90 pounds. This move suggests that the demand is likely to increase for the postal company’s shares.

Royal Mail Share Price Consolidates At Trend Line

The LON: IDS price chart shows the price consolidating above the diagonal trendline that it broke in July 2023. The trendline shown in the following chart is a very critical diagonal resistance for the share price of Royal Mail.

If the price continues to be supported by the trendline, the next bullish target is the 297p resistance level. However, the bullish Royal Mail share price would be invalidated if the bears break the trendline. This would likely lead to a sell-off that would take the price to the 252p support level.

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LON: IDS Chart

This post was last modified on Aug 11, 2023, 15:56 BST 15:56

Written By: Abdullah Sarwar

Abdullah Sarwar is a blockchain analyst and a cryptocurrency investor with more than 5 years of experience. He specializes in providing crypto price projections based on their fundamentals and price charts. He is also a successful day trader. He graduated in 2015 with a degree in electronic engineering. In his free time, he loves listening to electronic music and playing with trading bots.

Published by
Written By: Abdullah Sarwar