The U.S. dollar initially weakened following the release of the minutes for the September Federal Reserve meeting. The decision to keep rates on hold was due to global economic and financial market concerns, the China slowdown and low inflation.
The initial reaction for the dollar index was a quick selloff from 95.355 to 95.045, but price quickly pared its losses before the end of the U.S. session and currently trades around the 95.415 area.
The US dollar index daily chart shows the tentative respect of major support line from the August 24th low of 92.52. If we see price rally, initial resistance may come from the 50-day SMA which currently trades at the 96.13 level. Further upside could target the 97.20 region, it is around that area that we could see the formation of a bearish Gartley pattern.
If we see bearish momentum break below the noted support level, downward pressure could target the 94.00 handle.
The trade: Buy Dollar Index at 95.20 with a stop loss at 94.80 and take profit at 96.40. The risk/reward ratio is 1:3