Barclays (LON: BARC) share price is showing resilience despite growing concerns about the banking sector in the US. On Tuesday, British bank stocks, including Barclays, HSBC, and Lloyds, saw positive gains as the US banking crisis continued to unfold. First Republic Bank became the latest US bank to collapse, with the FDIC stepping in to sell it to JPMorgan Chase.
Barclays’ shares rose by 0.40% during early trading, reaching 160.52p, while HSBC led the sector with a 5.11% gain in the first session of the week. Despite this positive movement in bank shares, the FTSE 100 index remained relatively flat, reflecting mixed market sentiment following the long Labor Day weekend. However, increased volatility is expected as investors await the outcome of the FOMC meeting, which will also influence Barclays’ share price as it tests a key resistance level.
Most analysts expect the Federal Reserve to announce a 25-basis-point rate hike at the meeting. However, with the collapse of First Republic Bank on Monday, there is a possibility that the Fed could pause its rate hikes. The bank failed due to declining deposits and was ultimately taken over by JPMorgan Chase.
Despite Barclays’ strong recovery from its March 2023 lows, the stock has yet to break above the 160p resistance level. This key level is influenced by the 100-day moving average and the midpoint of its current trading range.
If Barclays breaks above 160p, the share price could turn bullish, with a potential target of 178.4p. Conversely, a failure to breach this level could lead to a correction, with the stock potentially falling to 142p. The FOMC decision and the Bank of England’s strategy to control inflation will be major drivers for bank shares moving forward.