Barclays share price continues to trade lower for the 2nd day running after PCP Capital Partners sued the UK’s biggest bank on Monday, claiming damages of up to 1.5billion pounds. The suit has come up as PCP Capital Partners alleges deceit on the part of Barclays, claiming that it came out the worse for it in an investment it made into the bank during the 2008 global financial crisis.
In 2008, a cash call from Barclays had seen investment from PCP Capital Partners, along with Qatar and Abu Dhabi investors. The suit claims that Barclays offered Qatar a better deal than it did to PCP Capital Partners. The firm now seeks compensation in civil litigation which Barclays as dismissed as “exaggerated”.
Barclays share price has taken a hit on the news as expected, but comments from the Deputy Governor of the Bank of England Jon Cunliffe are also pressurizing the stock. Cunliffe had in an event on Tuesday, said that there would likely be “a great deal of pain for the financial sector”. Barclays share price is currently 0.16% lower on the day, after losing 4.95% yesterday.
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Outlook for Barclays Share Price
Barclays share price is currently trading within an ascending channel. However, the formation of a shooting star candle on Monday at the 135.18 resistance was a bearish trigger for the downward moves of yesterday and today.
Today’s candle is now challenging the 125.44 support (highs of 10 March, 3/4 June all acting in role reversal). A breakdown of this support could spur a failure of the channel, allowing Barclays share price to target the 115.64 support level (10 March and 29 May lows). A further decline brings in 107.62 (26 May low) and 100.20 (7 May and 22 May lows) into focus.
On the flip side, a bounce on the present resistance or ascending channel’s trendline allows the price to resume its recovery move, targeting 135.18 on its way to the return line of the channel. If this step is successful, 147.48 becomes the next resistance target in range.