US Dollar Index Price Forecast: Bearish outlook remains in play near 103.50

• The US Dollar Index recovers some lost ground to near 103.50 in Thursday's early European session. 
• The DXY keeps the negative outlook below the 100-day EMA with a bearish RSI indicator. 
• The first downside target to watch is 103.20; the immediate upside barrier is seen at 104.10. 

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, trades in positive territory near 103.50 during the early European session on Thursday. 

However, the upside of the DXY might be limited as the Federal Reserve (Fed) indicated interest rate cuts were likely later this year. Additionally, the Fed officials lowered its forecast for economic growth and revised both its inflation projection and unemployment estimates higher.

According to the daily chart, the bearish outlook of the DXY remains intact, with the index holding below the key 100-day Exponential Moving Average (EMA). Further downside looks favorable as the 14-day Relative Strength Index (RSI), which stands below the midline near 31.75. 

The initial support level for the USD index is located at 103.20, the low of March 18. Sustained trading below the mentioned level could expose 101.88, the lower limit of the Bollinger Band. A breach of this level could see a drop to 100.53, the low of August 28, 2024. 

On the other hand, the high of March 14 at 104.10 acts as an immediate resistance level for the DXY. The additional upside filter to watch is 105.45, the high of November 6, 2024. The key upside barrier is seen at 106.00, representing the 100-day EMA and the psychological level. 

US Dollar Index (DXY) daily chart