The Barclays share price has rebounded this week after it fell to 130p. Yesterday, the shares ended the day at 145p after the Bank of England (BOE) interest rate decision. It has jumped by more than 12% in the past few days.
What happened: There are several factors moving Barclays and other UK banking stocks. First, in the Bank of England (BOE) interest rate decision yesterday, the bank said that negative interest rates were not a priority, at the moment. The bank also continued to emphasize that UK banks should continue preparing for such subzero rates. Negative rates would have a negative impact on top banks, especially Lloyds and NatWest that make a lot of money in the UK.
Second, the Barclays share price is also reacting to the relatively strong performance by European and American banks. In January, American banking giants like Goldman Sachs and Morgan Stanley delivered relatively strong results mostly because of their trading business. And yesterday, Deutsche Bank made strong earnings also.
Therefore, investors hope that Barclays will also release strong results on February 18. Finally, the shares are reacting to the ongoing Brexit talks on financial services.
Barclays share price technical outlook
In my last article on Barclays, I warned that the situation would possibly get worse before getting better. In it, I predicted that the stock would drop to 133p before rebounding. My prediction was correct since the stock fell to 130p and then started rising. The stock has now moved back to the ascending channel but it also seems to be forming a head and shoulders pattern.
Therefore, there are two potential scenarios going forward. First, the Barclays share price could climb to the upper side of the channel at 160p. Alternatively, because of the H&S pattern, it can drop below the support at 130p.
BARC share price chart