Nov 28 (Reuters) - The U.S. dollar could go either way and where it closes at the end of trading on Thursday could well be key for its direction.

The USD index , which tracks the dollar against a basket of six major currencies, edged up from a two-week low against its major peers in holiday-thinned trading on Thursday. That after suffering its steepest fall in four months, which pushed it as low as 105.85 in the prior session.

The slump on Wednesday to close under the 106.126 Fibo - a 23.6% retracement of the 100.15 to 108.09 (September to November) rise, was very bearish. The scope is growing for a much bigger drop to the 105.057 Fibo, which is a 38.2% retrace of the same 100.15-108.09 gain.

However, if there is a failure on Thursday to register a second close under the 106.126 Fibo, that would be the sign of a bear trap. A bear trap is set when a market breaks below a technical level but subsequently reverses, and is usually a bullish sign.

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(Martin Miller is a Reuters market analyst. The views expressed are his own)

((martin.miller@thomsonreuters.com))