The heightened pace of euro IMM long reduction recently may hint at further losses for EUR/USD as it approaches the 2018 low by 1.1508.
A fall beneath that low, which it struck on June 21, could lead trapped euro IMM longs to flip to short, adding to the base of sellers.
A move below 1.1508 would set the stage a test of the early-July 2017 weekly low of 1.1313.
That would also expose the late-June weekly low of 1.1119 the June 23, 2017.
This week's euro positioning on the IMM to be released later Friday nL1N1UM10Q, is likely to show little change owing to tight range that constrained EUR/USD in the July 18-24 reporting period.
Instead, the focus for a switch is likely to be the report that encompasses July 25-31 period.
Though the euro has only fallen 40 pips since Tuesday's close, yesterday's 0.7 percent post-ECB drop in the euro, the largest in the past month, has moved EUR/USD closer to a test of the 2018 low.
EUR-IMM Chart: Click here