USD/CHF explodes its consolidation range of 0.9540-0.9550 on the downside as DXY softens

• USD/CHF has slipped to near 0.9530 as the DXY breaks below its intraday range.
• Fed Powell is most likely to feature a 50 bps rate hike in sync with the testimony at the IMF meeting.
• Inflation in the Swiss area for 13-year still does not compel a rate hike from the SNB.

The USD/CHF pair is witnessing a breakdown of its consolidation range placed in a narrow range of 0.9529-0.9552 in the Asian session. The pair is likely to see a minor pullback as a sheer upside move recorded on Wednesday may call for some profit-booking in the counter.

It is worth noting that the asset is advancing right from the first trading session of April.  The pair have remained in positive territory amid a divergence in the ideology of policymakers of the Federal Reserve and Swiss National Bank. Fed chair Jerome Powell in his testimony on Thursday at the International Monetary Fund (IMF) meeting stated that a rate hike by 50 basis points (bps) is on cards. Well, to corner the situation of whooping inflation figure of 8.5% and consistency of Unemployment Rate below 4%, an aggressive hawkish stance is the key.

Meanwhile, investors have shrugged off the 13-year high inflation print at 2.2% by the Swiss statistics agency. The inflation in the Swiss area is advancing but still does not favors a rate hike option.  The SNB has been keeping its interest rates at 0.75% for the past six years to keep stimulus maintained in the economy.

The US dollar index (DXY) is also displaying a pullback to 100.50 as long liquidation kicks in after a juggernaut rebound. Going forward, investors will keep an eye on the US Gross Domestic Product (GDP) numbers. A preliminary estimate for the yearly US GDP is %1 against the prior print of 6.9%.