COMMENT-Dollar is in danger of a even bigger slump next week

March 7 (Reuters) - FX traders should beware that the U.S. dollar's big drop looks set for a steeper decline next week, especially if there is a daily close under a broken technical level.

The dollar wallowed near a four-month low on Friday as ever-shifting tariff policies fanned uncertainty and increased concern about growth prospects for the world's largest economy.

The USD index, which tracks the greenback against a basket of six major currencies, on Wednesday registered its biggest one-day fall since January 20. Fourteen-day momentum is negative, reinforcing the underlying bearish market structure.

Thursday has seen it drop below the 103.978 Fibo, a 61.8% retrace of the 100.150 to 110.170 (September to January) rise, a weekly close below which would unmask the 102.515 Fibo, a 76.4% retrace of the same 100.150 to 110.170 gain.

A failure to register a daily close under the 103.978 Fibo, however, would be the sign of a bear trap: set when a market breaks below a technical level but subsequently reverses. That would hint at a possible base.