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If the forecasts are accurate, NatWest’s share price might get a boost from rising interest rates expected later today. Over the past year, NatWest (LON: NWG) has performed exceptionally well, with the share price showing a 74.6% increase as of yesterday’s closing at 225.5p.
The UK banking sector is in the spotlight today as the Bank of England’s Monetary Policy Committee prepares to decide on interest rates. The derivatives markets are currently predicting a 64% chance of a 15 basis point hike in today’s meeting. However, some analysts believe that the rates might remain unchanged until the Central Bank’s December meeting.
While the exact timing is uncertain, it’s clear that interest rates will be rising soon. Banks typically benefit from higher interest rates, which could provide a positive boost for NatWest shares as we approach the typically strong month of December.
Looking at the daily chart, NatWest has had an impressive year, with its shares consistently trending upward in a rising wedge formation. The trendline support was confirmed this week when the share price held steady at 220p.
As long as this trend support holds, the share price is likely to advance toward the top of the pattern at 250p. However, it first needs to overcome the October high of 235p. Despite several attempts last month, the share price struggled to break through this level, making 235p the first resistance point, followed by 250p.
If the share price declines, the trendline at 221p will serve as the initial support level, followed by the 100-day moving average at 214p, and the 200-day moving average at 201.7p. In my view, the share price could soon test the 235p level and potentially move towards 250p, provided it stays above the trend support. However, if it closes below 221p, this would cloud the outlook and invalidate the immediate bullish projection.