The Lloyds share price is rising ahead of the important Bank of England (BOE) interest rate decision set for Thursday this week. LLOY is trading at 45.84p, which is 11% above the lowest level on April 21. Other London banks like Barclays, HSBC, and NatWest shares have also risen.
Why it matters: The BOE started its meeting today and it is expected to deliver its decision tomorrow afternoon. There will be no major changes to policy, according to most analysts. It will leave interest rates unchanged at 0.10%. However, its forward guidance on quantitative easing could be a key mover. Some analysts expect the bank to announce the timeline of potential tapering while others expect it to wait and see. In a note, an analyst at Deutsche Bank said:
“Ultimately, the question about tightening is really one of timing, but the BoE cannot be blind to the economic data and this meeting could be the time to fire the starting pistol.”
This decision is important for Lloyds Bank, which is mostly a national bank that dominates the mortgage industry. A hawkish BOE will likely push the stock price higher, and vice versa. The decision will come a week after the company published robust earnings.
Lloyds share price forecast
The four-hour chart shows that the Lloyds share price has surged recently. The shares have tested the upper side of the ascending channel and remained above the 25-day and 50-day exponential moving averages (EMA). The shares also seem to have formed an island reversal pattern, which is usually a bearish sign.
Therefore, while I remain bullish on the stock, we can’t rule out a pullback as traders target the lower side of the channel at 43p, which is about 6% below the current level. However, a cross above the resistance at 47.35 will invalidate this prediction.
Please don’t consider this investment advice. Views expressed here are those of the writer and the writer and InvestingCube will not be held liable for any losses.
LLOY share price chart
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