Barclays (LON: BARC) share price is showing strength despite growing banking concerns in the US. On Tuesday, shares of major British banks turned green amid a developing banking crisis across the Atlantic. First Republic Bank became the latest US bank to collapse which was taken over by FDIC and sold to JPMorgan Chase.
British banking giants like Barclays, HSBC, and Lloyds went up during today’s trading session. Barclays shares were trading at 160.52p after rising by 0.40% during the first 2 hours of trading. HSBC shares were the biggest gainer in the industry, which were up 5.11% on the first trading session of the week.
After the labor day holiday, the London Stock Exchange opened on Tuesday and showed mixed sentiments. The benchmark FTSE 100 index remained sideways despite a positive price action in the bank shares. However, the volatility may increase soon as the investors await the conclusion of the FOMC meeting tomorrow. This will also affect the Barclays share price, which is retesting a key resistance on its chart.
The majority of analysts are expecting a 25 bps rate hike by the US Fed in tomorrow. However, due to the collapse of the First Republic Bank on Monday, there is also a slight chance that the Fed will pause rate hikes. The US bank succumbed to the declining deposits and went into the FDIC receivership before eventually being sold to the financial giant JPMorgan Chase.
Despite a strong rally since its March 2023 lows, the LON: BARC chart is yet to break above the $160p resistance. As mentioned in my previous analysis, this resistance level comes from the confluence of the 100-day moving average and the midpoint of the current trading range.
A breakout above the $160p level can make Barclays share price prediction very bullish, with a target of 178.4p in sight. However, a breakdown from this level might result in a major correction till at least 142p. Tomorrow’s FOMC decision in the US and the BOE’s approach to tame inflation will be the major factors affecting bank shares.
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This post was last modified on May 02, 2023, 10:45 BST 10:45