Lloyds’ share price is set to end the week lower as it has posted a fourth straight day of losses. Today’s downside move was triggered by poor macroeconomic data that was released earlier in the trading session which showed that business activity in the manufacturing sector had suffered a sharp slump in January. Furthermore, retail sales in the United Kingdom failed to meet market expectations, rising by just 0.3% rise whereas the markets had expected it to increase by 1.4%.
Despite dismissing the notion of the Bank of England delving into negative interest rate territory, research analysts feel that the apex bank in the UK would have no option other than to delve into the dreaded negative interest-rate territory if the UK economy continues to face headwinds.
A drop into negative rate territory is viewed as a negative for UK banks.
Technical Outlook for Lloyd’s Banking Group
The daily chart reveals that the active candle has broken below the 50-EMA line, with a violation of the 34.77 support level. This move extends the drop following the breakdown of the symmetrical triangle on the daily chart.
The intraday violation requires confirmation by a 2nd successive penetration close below 34.77. This move opens the door for bears to target the 33.095 support. An additional target lies at 32.10, which is the site of a previous low that occurred on 21 December 2020.
On the flip side, failure to confirm the breakdown of 34.77 could allow for a bounce on this support. This bounce has to take Lloyds’ share price above the 50-EMA line to give the bulls a fighting chance of targeting the 35.970 resistance level. Beyond this point, further resistance lies at 37.02, with 38.26 lining up as a potential additional target to the north.
Lloyds Share Price; Daily Chart