* Bunds in tight range around resistance levels * Markets unsure about size, timing of any ECB bond buying * Yields fall at Italian sale, but real test on Thursday By Marius Zaharia LONDON, Aug 28 (Reuters) - Safe-haven German Bunds see-sawed in a tight range on Tuesday, with trading dominated by uncertainty over how the European Central Bank will structure a scheme for buying government bonds. Bund futures have struggled in the previous three sessions to break key resistance just above 144.00, which is roughly half-way between July's highs to August's lows, reached on the back of bets for a strong ECB intervention. Caution has set in due to uncertainty about the size, timing and conditions attached to the programme. German ECB board member Joerg Asmussen sought on Monday to take some of the heat out of the debate, saying the scheme would be tailored to dispel concerns it would be used to fund governments - a taboo for Germany's Bundesbank. But details are not yet finalised, with ECB President Mario Draghi deciding to skip Friday's gathering of central bankers in Jackson Hole due to a "very heavy workload", the bank said on Tuesday. Unless the ECB puts some meat on the bones in the next few days, Bunds are more likely to break above the resistance than retreat to lower levels, traders said. "As we get closer to the Sept. 6 (ECB) meeting, people are going to get more and more nervous," one trader said. Bund futures were last 9 ticks higher at 143.89, having traded in a 143.62-144.06 range throughout the day and in a 143.42-144.13 range in the previous three sessions. That compares with intra-day moves of more than two full points at the start of the month. Such a tightening usually occurs when prices approach key resistance levels, traders said. Futurestechs technical analyst Clive Lambert expected Bunds to break through the 144.13-17 resistance area in the near term and then target July's high of 146.26. UBS's Richard Adcock said it was better to wait for a break of 144.17 before entering long Bund positions. ITALIAN SUPPLY Short-term prospects for Bunds will also depend on how easily Italy is able to sell some 20 billion euros of debt in three auctions this week. A sale of two-year, zero-coupon bonds and inflation-linked debt went well, with Italy reaching its maximum target at significantly lower borrowing costs than recently. A truer test of investor appetite will be on Thursday, when Italy plans to sell up to 6.5 billion euros in five- and 10-year bonds. "The Italian auction today was only short-term paper ... The 10-year has been an area of the curve where there has been less appetite and the success in issuing there is critical for governments," UBS rate strategist Gianluca Ziglio said. He expected the auction to go well, helped by domestic demand and redemption flows, saying a bad result would make markets very risk-averse. Longer-term Italian yields were slightly higher across the curve, with the 10-year up 5.2 basis points at 5.767 percent. Some analysts said they might rise further in coming days. "Appetite for beyond the five- to seven-year sector is pretty low, so Italy might well need a concession ahead of the auction on Thursday to ensure the supply is reasonably well absorbed," RIA Capital Markets bond strategist Nick Stamenkovic said.

Source