The Lloyds share price is in a consolidation mode as investors focus on the state of the UK economy. LLOY shares are trading at 43.72p, where it has been in the past few days. This price is lower than this week’s high of 54.15p. However, it has jumped by almost 100% from its lowest level in 2020. Other banking stocks like NatWest, Standard Chartered, HSBC, and UBS have also been in consolidation.
UK economy struggling
Lloyds Bank is often seen as a barometer for the UK economy because of its business model. The firm operates the biggest bank in the UK and has a strong presence in key consumer and business lending areas. However, unlike Barclays, the bank does not have any major presence in other countries.
The UK economy is not doing well. In a report published by Lloyds Bank, output declined in six of 14 sectors in three months to April. However, eight of the remaining sectors continued to see output growth, albeit at a slower pace. At the same time, the number of companies seeing falling orders jumped to the highest point since January last year.
Lloyds share price are also reacting to the ongoing strike in the UK. Workers at key rail stations have started the biggest strike in over 30 years. They are protesting low wages, and better working conditions as inflation continues rising.
The next key catalyst for the stock will be the upcoming UK inflation numbers scheduled for Wednesday. Analysts expect the data to show that the country’s inflation surged to 9.1%, which will put pressure on the Bank of England (BOE) to hike interest rates.
Lloyds share price forecast
The daily chart shows that the LLOY share price has been in a tight range in the past few days. A closer look shows that the stock has formed a symmetrical triangle pattern shown in red. This triangle is nearing its confluence level, meaning a breakout is about to happen. It has moved slightly below the 25-day and 50-day moving averages.
Therefore, the outlook of Lloyd’s stock price is neutral for now. However, a move above the resistance at 45p will signal a bullish breakout. On the other hand, a bearish breakout will be confirmed if it moves below this week’s low of 41.8p.