US Dollar Price Forecast: The bullish outlook remains in play near 106.50

• The US Dollar Index drifts lower to near 106.50 in Thursday's early European session.
• The index keeps a positive view with the bullish RSI indicator.
• The immediate resistance level emerges at 107.45; the first downside target to watch is 106.00.

The US Dollar Index (DXY) trades with mild losses around 106.50 during the early European session on Thursday. The downside for the index might be limited as markets expect that Donald Trump's administration will reignite inflation and slow the path of rate cuts from the Federal Reserve (Fed), supporting the Greenback. 

Technically, the bullish trend of the DXY remains intact as the index is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. The 14-day Relative Strength Index (RSI) stands above the midline near 66.40, indicating that the path of least resistance is to the upside. 

The first upside target for the DXY emerges near the upper boundary of the Bollinger Band at 107.45. Any follow-through buying above this level could pave the way to 108.00, the high of November 21, 2022. Further north, the next hurdle to watch is the 110.25, the high of September 8, 2022. 

In the bearish event, sustained trading below 106.00, the round mark, could see a drop to 104.19, the low of November 7. The key support level is seen at 103.71, the 100-day EMA. A breach of the mentioned level could expose 102.95, the lower limit of the Bollinger Band.  

US Dollar Index (DXY) Daily Chart