Rolls-Royce Share Price Forecast: Fresh Risks Emerge

The Rolls-Royce share price will be in focus on Monday as worries of EU and US travel emerged during the weekend. The RR stock rose to 116p on Friday, which was about 38% above the lowest level in July this year. 

New risks emerge

Rolls-Royce Holdings is a global engineering company that manufactures aviation engines among other products. Recently, the stock has done relatively well and emerged as a leading performer in the FTSE 100 index. 

This performance was mostly because of the strength of the aviation sector. For example, more airlines have recently announced new large orders. Also, Rolls-Royce managed to report a strong half ear profit. 

At the same time, the Rolls-Royce share price has done well because of the overall hopes that rapid vaccination will lead to more demand. To a large extent, this has been right. However, the biggest risk is that the number of breakthrough cases in most countries like the United States has been rising. For example, the total number of Covid cases released in the US on Sunday was more than 88,000.

Therefore, the Rolls-Royce share price will be in focus after the WSJ reported that the EU was set to recommend halting nonessential travel from the US. The report said that EU officials, including the Slovenian presidency, have been deliberating on the issue for a while. Pressure has also increased because the US has maintained a ban on European nonessential travel to the US. 

Therefore, these new development pose a major risk to Rolls Royce share price. Besides, the main reason for the rally has been because of hopes of widespread travel as the vaccination process increeases.

Rolls-Royce share price forecast

The daily chart shows that the Rolls-Royce share price has been in a relatively slow bullish trend. Along the way, the stock has moved above the 25-day and 50-day EMAs. The RSI has also been on an upward trend and is currently at 63. The stock is slightly below the key resistance level at 128p. Therefore, while these risks remain, there is a possibility that the stock will keep rising as bulls target the resistance at 128p. On the flip side, a drop below 120p will invalidate the bullish view.

Rolls-Royce share price