As expectations surrounding the Bank of Japan’s dovish stance on its monetary policy increases, the yen has fallen against the dollar. Ian Coleman, from First 4 Trading, is looking to buy a dip as the currency pair flounders.

On Monday, traders engaged in heavy dip buying under the daily Ichimoku Cloud as the yen weakened. Overnight the Japanese currency continued to fall as signals of the BoJ’s economic easing became increasingly apparent. The BoJ doubled lending programs to 7 trillion yen, allowing banks to borrow twice as much low-interest money.

Before engaging in the trade Ian has observed two important resistance levels. Mild concern surrounds the fact that the RB Spoke resistance has stalled around USD 102.65 and a secondary resistance level is located at USD 102.85.

Noting a low risk-reward scenario, Ian is initially looking to buy small at the open followed by another round of buying at USD 102.40. His stop for the trade is placed at USD 102.20, with two targets of USD 103 and USD 103.30.

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