USD/JPY is expected to continue its downward movement. Overnight, the US stocks pared gains to close lower as Federal Reserve Chair Janet Yellen told Congress that the central bank would not reverse the rate increase program started in December while it is watching developments in global financial markets carefully. Energy and materials shares declined along with oil prices, while health-care and technology shares performed well. The Dow Jones Industrial Average slid 0.6% to 15914, the S&P 500 dipped less than 1 point to 1851, while the Nasdaq Composite was up 0.4% to 4283.

Nymex crude oil fell further by 1.8% to $27.45 a barrel, gold increased 0.7% to $1,197 an ounce, while the benchmark 10-year Treasury yield declined further to 1.706% from 1.728% at the previous session.

Meanwhile, weakness in the US dollar followed Yellen's comments led traders to think that there may not be a rate increase in March. USD/JPY plunged 1.6% to 113.32, GBP/USD gained 0.3% to 1.4520, while EUR/USD remained flat at 1.1289. The pair confirmed a "triangle" bearish continuation pattern before accelerating downward. Currently, it is trading near the lower Bollinger band with the first downside target at 111.00. The intraday relative strength index has entered the oversold area below 30. Below 111.00, the next support will come at 110.25.

Trading recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 111. A break of that target will move the pair further downwards to 110. The pivot point stands at 113.10. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 114.20 and the second target at 115.25.

Resistance levels: 114.20, 115.25, 115.85

Support levels: 111, 110.25, 109.65