USD/CHF faces CPI test amid dollar weakness and technical resistance

USD/CHF is trading near critical technical levels as traders await the upcoming US CPI release, which could determine whether the dollar extends its recent decline or stages a recovery. The pair has been under pressure from broad dollar weakness, with the US Dollar Index showing signs of fatigue near multi-month highs. Market participants are closely monitoring inflation data, as any deviation from expectations could significantly impact Federal Reserve rate expectations and dollar sentiment. Technical analysis shows USD/CHF facing immediate resistance at the 0.8650 level, while support has formed near 0.8580. A stronger-than-expected CPI reading could propel the pair above resistance toward 0.8700, while disappointing inflation figures might accelerate the decline toward the 0.8500 psychological support. Swiss franc strength has been supported by its traditional safe-haven appeal amid global economic uncertainties.