- The momentum on Barclays share price is driven by a strong balance sheet and the BoE's interest rate decision has also secured NII.
Barclays share price returned to the upside in early mornings session on Friday, trading at 324p to rise by 1.5%. The gains came a day after the Bank of England (BoE) kept interest rates unchanged at 4.25% in line with analysts’ expectations. That means Barclays’ Net Interest Income (NII) is undisturbed for now, offering support for its stock’s upside. Furthermore, the BoE indicated no hurry to slash interest rate, highlighting weakness in the labour market and exposure to the geopolitical risks of the war in the Middle East.
The Middle East crisis is driving oil prices up, with benchmark Brent crude prices having risen by nearly 15% in the last two weeks. A continuation of the trend could trigger energy-driven inflation, which could see the BoE keep interest rates elevated for longer. Such a scenario could supply tailwinds to Barclays share price.
In the near-term, the stock is leaning on share buyback program and the bank’s recently announced cost cutting initiatives to provide support. Barclays announced earlier this month that it plans to slash 200 jobs from its investment banking division.
In addition, the bank is also bidding to acquire Banco Sabadell’s UK division, TSB. Barclays (LSE: BARC) has reportedly floated a non-binding £1.7 billion bid and is direct competition with Santander, after NatWest withdrew. TSB has about 5 million customers in the UK and its acquisition could expand Barclay’s UK market barely a year after it acquired Tesco. Another acquisition could inject fresh impetus into Barclays share price momentum.
Barclays Share Price Prediction
Barclays share price pivots at 320.90p and the upside will prevail if the buyers keep the action above that level. That momentum will likely meet initial resistance at 325.90p. However, an extended control by the buyers will break above that level and the stock could go on to test 329.95p.
On the other hand, the momentum could shift to the downside if BARC price breaks below 320.90p. In that case, initial support is likely to be at 318.45p. The upside narrative will be invalid if the price breaks below that level. A stronger downward momentum will potentially test 316.15p.
