NAB Bank share price forecast ahead of RBA decision, FY earnings

The National Australia Bank (ASX: NAB) share price bounced back on Monday after the strong financial results by Westpac Bank. The stock jumped to a high of $29.34, its highest point since October 28th. It has risen by over 17% from the lowest point in 2023.

RBA decision and earnings

Australian banks started the week well. In a report, Westpac, the second-biggest company in the country, said that its revenue and profitability jumped in the last financial year. This bounce happened because as the net interest income (NII) and non-NII results jumped during the period.

NAB, the fourth-biggest Australian bank by assets, will be in the spotlight this week as the company publishes its quarterly and full-year results on Thursday. Barring any major event, analysts believe that NAB will also publish strong results.

The most recent trading update showed that NAB was facing some headwinds. Its revenue dropped by 2% in the third quarter because of lower margins. Its Net Interest Margin (NII) dropped by 5 basis points. It attributed the NII drop to higher deposit costs and more competition in the industry.

Therefore, in this week’s report, analysts and investors will focus on the company’s revenue growth and profitability. Most importantly, they will look at the company’s dividend policy now that Westpac has hiked it.

The other important NAB news to watch will come out on Tuesday morning when the Reserve Bank of Australia (RBA). Unlike the Federal Reserve, ECB, and Bank of England (BoE), analysts believe that the RBA will decide to hike rates by 25 basis points.

If this happens, the RBA will hike interest rates from the current 4.10% to 4.35%, the highest level in more than a decade. It will likely do that because of the rising inflation, which stood at over 5% in Q3.

NAB chart by TradingView

The daily chart shows that the NAB stock price bottomed at $27.80 on October 30th. It has now jumped to a high of $29.35 and is nearing the YTD high of $29.80. The stock has moved above the 50-day and 25-day Exponential Moving Averages (EMA).

Further, the Relative Strength Index (RSI) has moved above the neutral point of 50. It is also nearing the 78.2% Fibonacci Retracement level. Therefore, the shares will likely continue rising as buyers target the YTD high of $29.80.

If this happens, the shares will likely rise and retest the important resistance point at $31.16, the highest level on February 10th. This price is over 6.30% from the current level.