Comments in May by Bernanke suggesting the Fed could start unwinding its massive monetary stimulus later this year sparked a wave of panic in financial markets.
June's softer-than-expected US retail sales data suggest Federal Reserve Chairman Ben Bernanke could reiterate that monetary stimulus will stay in place for now when he testifies to Congress this week, but don't bet on it, say some strategists.
"Never say never with Bernanke and I think that was very much the case last week when he surprised markets," said Robert Rennie, global head of currency strategy at Westpac, talking about what to expect from this week's Bernanke testimony on CNBC Asia's "Squawk Box."
"In recent weeks the message that he's given is that we have seen signs of improvements in the US economy and we're going to move towards tapering. Then he gives us the message that we got last week, so I think markets will be cautious ahead of Bernanke's testimony," he added.
The Fed chief has sent markets on a rollercoaster ride in recent months.
Comments in May by Bernanke suggesting the Fed could start unwinding its massive monetary stimulus later this year sparked a wave of panic in financial markets. A remark last week that a highly accommodative policy was needed for now meanwhile was met with broad relief.
Data on Monday showed US retail sales rose just 0.4 percent in June versus market expectations for a 0.8 percent increase which analysts say raise the prospect of a weaker-than-expected reading for second-quarter gross domestic product (GDP) growth.
"This is a consumer driven economy, without retail sales coming anywhere near expectations it is a bit of a downer…there is some talk of a potentially negative GDP number," Ben Lichtenstein, president at Tradersaudio.com in Chicago told "Squawk Box."
Bernanke is scheduled to deliver his semi-annual testimony on monetary policy before the House Financial Services Committee on Wednesday and to the Senate Banking Committee on Thursday.
"The retail sales report will give Bernanke greater motivation to sound cautious and more dovish at his semi-annual testimony on the economy," said Kathy Lien, managing director at BK Asset Management, in a note.
"While we doubt that the Fed has changed its mind about tapering this year, Bernanke will spend most of his time in Washington reassuring Congress it will not send the economy into a downward spiral," she said, adding that Bernanke's two testimonies could be market moving as the Fed chief may be probed more closely on plans to unwind the Fed's USD 85 billion monthly bond purchases.
Lichtenstein at Tradersaudio.com said that the timing of Fed tapering, the key focus for investors, was anyone's guess.
"If we want to get to 6 percent unemployment, 2.5 percent growth, then until we see those numbers again we will see the status quo, limited talk in terms of the taper," he added.
The Fed has said that it would maintain its ultra-easy monetary policy until unemployment fell to 6.5 percent. The unemployment rate stood at 7.6 percent in June.
-By CNBC's Dhara Ranasinghe; Follow her on Twitter: