Barclays’ share price started the year on a strong note, rising for three consecutive days and now sitting just below its highest point in 2021. The stock has surged by over 128% from its lowest point last year.
On Thursday, Barclays and other UK banks were among the top performers on the FTSE 100 index. Standard Chartered, NatWest, HSBC, and Lloyds all gained more than 2%, largely due to the Federal Reserve’s recent minutes.
On Wednesday, the Fed indicated it plans to raise interest rates at least three times this year. Historically, banks tend to perform well during periods of rising rates. In the UK, the Bank of England (BOE) has already raised rates by 0.25%, and analysts expect 3 to 4 more hikes this year.
While these rate increases will improve bank margins, there are potential challenges that could limit this recovery. For example, the housing market in the UK and other key regions may begin to slow down.
The daily chart shows Barclays’ share price has been in a strong upward trend over the past few months, climbing about 13.5% from its December low. It has also moved above the 25-day and 50-day moving averages, and the MACD is trending upward.
However, the stock remains just below the 2021 high of 204p. While the overall outlook is positive, investors should remain cautious. The stock appears to be forming a double-top pattern, a reliable bearish signal, with the neckline at 176p.
Further gains will be confirmed if the stock breaks through the key resistance level at 204p, indicating that there are still buyers active in the market.