The USD/CHF pair continues to decline, facing headwinds. Intraday losses are driven by selling pressure on the U.S. dollar, pushing spot prices back below the key 0.8400 psychological level — although bearish conviction remains limited for now.

The greenback is under pressure as many traders prefer to wait for the U.S. Producer Price Index (PPI) release and a speech by Federal Reserve Chair Jerome Powell, both scheduled for today. A slight deterioration in global risk sentiment, as reflected in the weak tone of equity markets, is also supporting demand for the Swiss franc as a safe-haven asset, further pressuring the USD/CHF pair to the downside.

However, optimism surrounding the 90-day trade truce between the U.S. and China and the broader de-escalation of trade tensions between the world's two largest economies is helping to cap the franc's gains. Additionally, diminished expectations for aggressive Fed rate cuts — amid reduced concerns over a U.S. recession — continue to offer support to the dollar, preventing a deeper slide in the pair and warranting caution for bearish traders.

To gain better trading opportunities, it would be prudent to await the PPI report due during the North American session. The broader fundamental backdrop also supports the case for dip-buying. As such, it would be wise to wait for a confirmed breakdown below the 0.8325 level — or below yesterday's swing low — before concluding that the recent recovery from the April low, as well as levels last seen in August 2011, has fully run its course. Notably, the Relative Strength Index (RSI) on the daily chart has yet to move into negative territory.