Share Price Drivers

We consider the short-term technical health of the Lloyds Banking Group and Barclays share price at the start of a new week.

Lloyds Banking Group PLC (LON:LLOY) shares are seen trading 0.02 pct higher at 80.81. The outlook for LLOY remains strained with the 80p region proving to be a formidable sticking point.

Ahead of 80p we note that 85p is also a key level of resistance that must be encountered before we call a bullish scenario on the stock.



"As long as 84.75 is resistance look for 74.5," warns a bearish note issued via trading provider IG, "the upside breakout of 84.75 would call for 88.25 and 90.25."

Further, "the RSI is above its neutrality area at 50. The MACD is below its signal line and negative. The penetration of 50 on the RSI would call for further downside. Moreover, the stock is trading under both its 20 and 50 day MA (respectively at 81.91 and 81.08)."

Turning to sector peer Barclays PLC (LON:BARC) we note the stock is trading 0.09 pct higher at 258.24.

Where LLOY is tipped to head lower, the opposite is true for BARC where a pivot point stands at 249.

"As long as 249 is not broken down, we favour an upmove with 297 and then 311 as next targets," says a note issued by IG.

The daily technical indicators are bearish but are close to supports and it is the assumption that support levels will hold that allows for the bullish pro-BARC case.

Markets: FTSE heads lower

Banking stocks are actually outperforming a week UK 100 this morning; the FTSE opened 20 points lower following a negative session in Asia.

"Chinese stocks were under pressure following a local media report that stated medium-sized banks are tightening its financing to property developers. The tightening, which is likely to remain until end of March, is viewed as a negative in the short-term as the authorities try increase the quality of credit on offer to help overall growth," says Lee Mumford at Spreadex.

Natural gas rallied to its highest level in five years as analysts boosted the energy demand outlook following the frigid weather. Inventory data showed that supplies dropped to the lowest in a decade, advancing as much as 5.6 percent overnight.

Headline currencies remained steady ahead of the European open as political unrest in Ukraine showed signs of settling down. Ukraine’s parliament voted on Saturday to remove President Viktor Yanukovich, with freed Yulia Tymoshenko as the replacement.

On the quiet economic front, Germany IFO Business Survey is scheduled to report at 09:00 GMT. With Germany being Europe’s leading economy, analysts will play close attention to the figure to see if Germany remains on track to economic expansion.

Developments during the Group of 20 nations showed that monetary policy should remain accommodative for now as economies pledge to boost growth by more than $2 trillion over the next five years.