NZD/USD flat lines below mid-0.6000s, seems vulnerable near one-month low amid bullish USD

• NZD/USD struggles to lure buyers amid the underlying bullish tone surrounding the USD.
• Bets for smaller Fed rate cuts and elevated US bond yields continue to boost the buck.
• A weaker risk tone also undermines demand for the Kiwi amid dovish RBNZ expectations.

The NZD/USD pair fails to capitalize on the previous day's modest recovery gains and seesaws between tepid gains/minor losses through the Asian session on Wednesday. Spot prices currently trade around the 0.6035-0.6040 region and remain close to over a one-month low touched on Tuesday amid a bullish US Dollar (USD).

The USD Index (DXY), which tracks the Greenback against a basket of currencies, prolongs its monthly uptrend and climbs to its highest level since early August in the wake of bets for a less aggressive policy easing by the Federal Reserve (Fed). In fact, the markets have fully priced out the possibility of another jumbo Fed rate cut in November as the recent US macro data suggested that the economy remains on strong footing. 

Apart from this, the risk-off impulse, persistent geopolitical risks stemming from the ongoing conflicts in the Middle East and the US political uncertainty turn out to be other factors underpinning the safe-haven buck. The New Zealand Dollar (NZD), on the other hand, is pressured by expectations that the Reserve Bank of New Zealand (RBNZ) will cut rates aggressively. This further contributes to capping the NZD/USD pair.

From a technical perspective, the recent breakdown below the 200-day Simple Moving Average (SMA) and the lack of buying interest suggest that the path of least resistance for the NZD/USD pair is to the downside. Hence, any attempted recovery move is more likely to attract fresh sellers and remain capped. Traders now look to the US Existing Home Sales data and Richmond Fed President Thomas Barkin's speech for a fresh impetus.