The Lloyds share price rose above a key resistance level after the relatively mixed UK mortgage data and as the sterling tumbled to the lowest level in 9 months. The LLOY stock jumped to 46.35p, which was the highest level since August 16.
UK stagflation fears
Lloyds is the biggest domestic bank in the UK. Through its several brands, the company has become the biggest mortgage provider in the country. As a result, the company has done relatively well in the past few months as demand for mortgages rose.
Data published today showed that the mortgage industry remained steady in August. Mortgage lending increased to more than 5.29 billion pounds in August after falling by more than 1.76 billion pounds in the previous month. This increase was better than the median estimate of 3.68 billion pounds.
At the same time, the number of mortgage approvals declined from 75.13k in July to 74.45k in August. These numbers provide signals that the company is doing relatively well.
At the same time, the Lloyds share is rising at a time when there are risks of stagflation in the UK. Stagflation is defined as a period of low economic growth accompanied by stubbornly higher inflation.
Economists expect that the country’s inflation will rise to more than 4% in the near term as the cost of energy shoots higher. In a statement today, a federation of retailers said that they will hike prices as challenges remain at elevated levels.
Lloyds share price forecast
The daily chart shows that the Lloyds share price has bounced back substantially in the past few sessions. And today, the shares managed to move above the key descending trendline shown in black. The 25-day and 50-day moving averages have also made a bullish crossover pattern.
It is also approaching the July high at 46.97p while the two lines of the MACD have moved to the positive side. Therefore, there is a likelihood that the LLOY share price will soon jump to the important resistance level at 50p.