US Dollar Index Price Forecast: Key support level emerges near 103.00, oversold RSI condition eyed

• The US Dollar Index rebounds to near 103.55 in Wednesday's early European session, adding 0.13% on the day. 
• The negative outlook of the index remains in play, but further consolidation cannot be ruled out amid the oversold RSI condition. 
• The crucial support level to watch is the 103.10-103.00 region; the immediate resistance level is seen at 104.40.

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, recovers to near 103.55 after bouncing off four-month lows around 103.20. However, the upside for the index might be limited amid concerns mounted over a US slowdown and the impact of tariffs on global economic growth.

According to the daily chart, the bearish sentiment of the DXY remains intact as the index holds below the key 100-day Exponential Moving Average (EMA). The downward momentum is supported by the 14-day Relative Strength Index (RSI), which stands below the midline. Nonetheless, the oversold RSI condition indicates that further consolidation cannot be ruled out before positioning for any near-term DXY depreciation.

The key support level for the USD index emerges near the 103.10-103.00 zone, representing the lower limit of the Bollinger Band and the psychological level. Further south, the next contention level is seen at 102.27, the low of August 14, 2024. The additional downside filter to watch is 100.53, the low of August 28, 2024. 

On the bright side, the first upside barrier for the DXY is located at 104.40, the high of March 6. Any follow-through buying above this level could pave the way to 106.35, the 100-day EMA. A decisive break above the mentioned level could see a rally to 107.38, the high of February 19.  

US Dollar Index (DXY) daily chart