The market remains bearish for 10-year gilts after reaching the target of 109.24, says Dmytro Bondar at RBS. However, as prices approach the lower Bollinger band, a bullish correction/consolidation should be expected but this will be followed by the return of downside pressure.
At the same time, the slow stochastics also points to the necessity of correction, implying a possible move towards 110.44 resistance. However further upside (110.96 and 111.18 are key levels) seems unlikely and even if a spike occurs, will not be expected to sustain there. I think the market will be further exposed to more downside to the lower band of 108.90 and possibly 108.04 once the bounce is completed.