By Wayne Cole

SYDNEY, June 10 (Reuters) - The Australian and New Zealand dollars flatlined on Wednesday as a fresh round of fighting in the Middle East kept investors on the edge, while the Aussie faced an added burden from shrinking yield buffers.

The Aussie was stuck at $0.7027 AUD=D3, having been as low as $0.7005 overnight before finding support. More support lies at $0.6979 and $0.6834, with resistance around $0.7080.

The kiwi dollar was also little changed at $0.5821 NZD=D3, having held relatively steady overnight. Support comes in at $0.5779, with resistance at $0.5846 and $0.5993.

A run of softer economic data has been weighing on the Aussie as investors pare back expectations for another rise in the Reserve Bank of Australia's (RBA's) 4.35% cash rate.

The market had long given up on a hike at the RBA's June 16 meeting, but pricing for August has come back to around 35%, from more than 80% a month ago. 0#AUDIRPR

"The data releases challenge our call for a 25bps RBA hike at the August meeting," said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities.

"To justify a hike at the August meeting, the monthly May CPI print will need to show firm evidence of pass-through to higher prices."

The May consumer price reading is out on June 24 and follows an April reading that surprised on the downside.

At the same time, futures have swung to fully price in a rate rise from the Federal Reserve by December. 0#USDIRPR

The shift has seen the spread between Australian AU3YT=RR and U.S. three-year debt shrink to its smallest since November last year at 32 basis points. The premium had been above 80 basis points in April.

The Reserve Bank of New Zealand next meets in July, and markets imply an 85% probability it will hike by 25 basis points to 2.50%. Investors see a further two moves to 3.0% by year-end, and an ultimate top around 3.5%. 0#NZDIRPR