FOREX-Euro off high, capped below 200-day average
* Euro steadies ahead of German court ruling
* Verdict originally planned for Wed but to be confirmed on Tues
* Euro seen capped below 200-day moving average
* Fed seen more likely than before to embark on QE
By Hideyuki Sano
TOKYO, Sept 11 (Reuters) - The euro hovered below a near-four-month peak against the dollar on Tuesday as traders grew wary after the currency's sharp gains late last week and ahead of key events in Europe and the United States.
The euro traded at $1.2760, unchanged in early Asian trade and off a high around $1.2815 hit on Friday just after poor U.S job data raised expectations that the Fed will likely launch another asset purchase programme on Sept 13.
For now, the euro faces major resistance from its 200-day moving average, which stood at $1.2834 on Tuesday. The euro has not been traded above that average for nearly a year.
"I tend to think that the euro is unlikely to rise sustainably above the 200-day average. There are few reasons to buy the euro above that level," said Makoto Noji, senior strategist at SMBC Nikko Securities.
While the European Central Bank's announcement of a new bond buying plan last Thursday - seen as aimed at helping cash-strapped Spain - boosted risk appetite, there remain many hurdles for the euro.
Germany's constitutional court had been set to rule Wednesday whether Germany can legally participate in the euro zone's permanent bailout fund, a vital decision as the ECB can buy government bonds only in conjunction with the bailout fund.
Few market players expect the court to rule the fund unconstitutional, but some think the judges could attach fresh conditions on any future aid Germany may grant to other euro zone countries.
Before that, though, following a fresh complaint from a ruling party lawmaker against the ECB's bond buying, the court is expected to decide on Tuesday whether to go ahead with its rescue fund ruling on Wednesday or delay to consider the complaint.
Even if the court gives a green light to the bailout fund, and therefore the ECB's bond buying plan, the euro remains vulnerable to developments in Spain, which is expected to ask for a bailout, and Greece, whose foreign lenders rejected parts of an austerity package prepared by the government.
Spanish Prime Minister Mariano Rajoy said late on Monday that he expected the European Union to set reasonable conditions for Spain if the country sought a bailout but added no decision on a bailout would be taken ahead of the Sept. 14-15 meetings of euro zone and EU finance ministers.
"If Spain asks for help, it will have to tighten fiscal policy and carry out structural reforms. That would be a thorny path which could even cause social unrest at worst as we know from Greece's experience," said SMBC Nikko's Noji.
Greece acknowledged on Monday it was having trouble persuading foreign lenders to accept a plan to save nearly 12 billion euros over two years, essential to unlocking aid payments the country needs to avoid bankruptcy..
Still, the euro is supported by expectations that the U.S. Federal Reserve may start another series of quantitative easing, most likely in the form of buying of government and other debt, after its policy meeting ending on Thursday.
In a Reuters poll taken after Friday's payrolls report, economists saw a 60 percent chance of the Fed embarking on QE3 this week compared with 45 percent in a late August poll. .
As a result, the dollar stood near a four-month low against a basket of currencies, with the dollar index at 80.357, near Friday's low of 80.151.
Against the yen, the dollar traded at 78.20 yen, near five-week low of 78.02 yen hit on Friday.
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