FXstreet.com (Barcelona) - Karen Jones, Head of Technical Analysis at Commerzbank notes that USD/JPY had a strong rebound off the 240 minute cloud.

She writes, “USD/JPY eased back to its 240 minute cloud and saw a strong rebound. It is possible that this is the only correction that we will see, however the intraday Elliott wave count is indicating a deeper retracement to 91.40 and possibly 89.55 is likely prior to another leg higher. We also note that the daily RSI has not confirmed the new high. The 240 minute cloud is located currently at 92.18/71.”

She notes that the market has recently met its target of 93.32/96 - the 38.2% retracement of the move down from 2007 and she is wary of a small retracement towards trend line supports. Overhead she notes the 2010 high at 94.99 then the March 2009 spike low at 95.77. Jones feels that the market will find some support at the 20 day ma at 91.40 and the 2 month up channel at 90.66, while above here the market will remain immediately bid. She writes, “This support is reinforced by the 88.79 4 month up trend.”