### KIWI LOOKS PRIMED FOR ANOTHER ATTEMPT AT...>

KIWI: ### KIWI LOOKS PRIMED FOR ANOTHER ATTEMPT AT 2018 HIGHS

-NZD/USD already sits with gains of close to 3% YTD, but has retreated close to

2% from the year's highs. The most profitable strategies suggest further gains

are forthcoming which could prompt a recovery to the 2018 highs of $0.7438.

-NZD has solidly outperformed other commodity-linked FX in 2018 (up 4% vs. CAD,

up 2% vs. AUD) and any further recovery in commodities will continue to flatter

NZD vs. the USD as CAD & AUD catch up.

-Milk powder auction prices remain vital. Having bottomed in late November,

prices have staged an impressive recovery in 2018 and the average price drawn

remains 5.5% higher than the Q4'17 average.

-The most profitable NZD/USD strategy of the past 12 months has been via the

Directional Movement Index. After a sell signal in late Feb/early Mar, the -ve

DMI has dropped, resulting in a buy signal since Mar7. Additionally, the best

strategy YTD (KBand) has had a buy signal in place since Feb28.

-Most economists see NZD/USD broadly unchanged from current levels this year.

Median forecast is for a small rise to $0.73 by Q4.