• NZD/USD comes up for air following being shot down by the bears. 
• The week ahead will unfold with key US events. 

NZD/USD was shot out of the sky on Monday in the New York session in a bid for the greenback. The bird fell from a high of 0.6252 and made a low of 0.6193 before bulls stepped in to take it back to 0.6207 where it trades at the time of writing, flat on the day. 

The US dollar firmed after a brief spell on the back foot, potentially on reports relating to the White House's proposed announcements of  an easing to some of Chinese tariffs later this week in an attempt to dampen elevated inflation helped inject some optimism back into markets on Monday.

Meanwhile, Speculation is beginning to emerge that the market may have over-estimated the extent to which the Federal Reserve may have to hike rates this cycle. ''Whilst this may have softened net USD positions last week, safe-haven demand is USD supportive,'' analysts at Rabobank explained. 

Additionally, we had data on Friday that showed euro zone inflation was surging to another record. This has hardened the case for the European Central Bank to raise interest rates later this month for the first time in a decade. However, moderate action is expected in comparison to the Fed.

For the week's calendar, Nonfarm Payrolls is expected to show that Employment likely continued to advance firmly in June but at a more moderate pace after three consecutive job gains of around 400k in March-May, analysts at TD Securities said.

Minutes of the Federal Reserve's June meeting will also be eyed. 

''Persistent high CPI inflation and nascent signs of de-anchoring inflation expectations forced the Fed to amp the pace of rate tightening. The meeting minutes are likely to offer further colour around the Fed's more hawkish reaction function,'' the analysts at TD Securities said. 

''The focus this week remains on US data, and that potentially speaks to more volatility (and possibly a further downward skew in risk to the NZD) now that markets have taken the view that US payroll growth will be soft (expectations are calling for a 275k lift) and with US bond yields this low. FX markets will recalibrate tonight when US cash bond and stock markets re-open after the holiday,'' analysts at ANZ Bank argued.