NZD/USD retains topside momentum. Friday's.....>

KIWI: NZD/USD retains topside momentum. Friday's close above $0.6357, the 61.8%

Fibo retracement of the Sep 12 - Oct 1 sell-off, allowed the pair to confirm an

inverse head and shoulders formation, a bullish reversal pattern. The latest

rally was sparked by a Doji (Oct 16), which prompted a "three white soldiers"

candlestick pattern to unfold, with a break of the 50-DMA seen in the process.

- The rate has recently drawn support from a more favourable risk backdrop.

There has been a growing perception that a no-deal Brexit can be averted, while

the U.S. and China have flagged willingness to finalise their "phase one" trade

deal. Locally, Westpac, BNZ and Fonterra upgraded their milk price forecasts.

- However, the highlighted developments come with caveats, which should keep

participants on alert. The U.S-China trade saga is still far from a definite

resolution and it has a track record of taking abrupt turns. Meanwhile,

Fonterra's update featured a list of uncertainties clouding the outlook.

- Re: domestic MonPol, mkts price in an ~83% chance of a 25bps OCR reduction

when the RBNZ meets in Nov, down from the ~97% baked in at the end of last week.

- See chart at: https://emedia.marketnews.com/marketnewsintl/NZDUSD22102019.png