The US Dollar has been trading in a range against most major currencies over the last couple of weeks. This is after it lost considerable ground over the previous weeks/months.

But, today´s US CPI (consumer price index) and retail sales report should finally give us direction.

Yesterday, the producer inflation PPI (producer price index) report was released and went both ways; the main number slightly beat expectations, while the core number slightly missed them.

Also, Yellen's testimony of the past two days has been unclear. On the one hand, she acknowledged the strength of the US economy and on the other, she didn´t make any hawkish comments either. That combination left the market wondering what will happen next.

Either the CPI or retail sales numbers should give us some direction today, at least for the near-term, perhaps for a few trading sessions.

Retail sales have disappointed over the last few months and last month they dived into negative territory. So, there´s definitely interest in this report, with the CPI numbers specifically in the spotlight.  

The market seems to be leaning more towards a disappointing number. Therefore, I think that the impact on the USD will be bigger if the CPI report surprises us for the better, rather than the opposite.