After five consecutive weeks of declines, the U.S. dollar finally received a boost last week leaving many traders wondering if this spike is going to be short-lived or if it would lead to a major reversal and a re-test of the 14-year high.

The motivation behind the rally cannot be attributed to improvement in macroeconomic conditions as only Tier 2 data were released from the U.S. and were rather mixed. In fact, the dollar essentially got a boost from President Trump comments on Thursday regarding the announcement of a phenomenal tax reform proposal to be expected in the next two to three weeks. It’s possible that nothing will take fruition as these were the same promises that drove U.S. equities to record highs after the elections; however, it was enough to distract investors from his initial policies on travel bans and protectionism.

There’s a high chance for the greenback to resume its rally the week ahead, especially if such comments were reiterated, but traders should be aware that with no progress on such policies the impact on the dollar’s price action will be diminished on the longer run. Another risk dollar bulls should be aware of is that President Trump is against a strong currency, so a reduction in taxes along with spending programs may come along with policies to cap any potential rally in the greenback, such as implementing trade tariffs.

Fed Chair Janet Yellen’s first semi-annual testimony before Congress on Tuesday and Wednesday is going to grab most of traders’ attention the week ahead. The Fed’s statement on February 1 didn’t provide any additional clues on monetary policy direction, and as of last week, markets were only pricing in 13.3% chance for a rate hike in March and 23.7% in May. Overall, markets still believe that only two rate hikes will occur in 2017 as opposed to the Fed’s guidance of three. In terms of economic data, there wasn’t sufficient evidence to support aggressive tightening, and same applies for fiscal measures. Thus, it’s going to be interesting on which side will Yellen move the needle.  If she was able to convince the markets that the Fed is on the path of three rate hikes and that March is a live meeting, then U.S. bond yields will rise further and the best way to play it is against the Japanese Yen. I choose the Japanese currency because yield spreads of U.S. and Japanese bonds will potentially widen the most, thus providing USDJPY another boost towards 115. Otherwise a dovish message will lead USDJPY to resume its six weeks’ downtrend potentially retesting 111.50.

Despite the fact that Yellen’s testimony is likely to be the major risk event for the U.S. dollar; traders will also have a busy economic calendar to monitor. Inflation figures, retail sales, industrial production, housing starts and building permits are all due to release.