The Euro dropped below 0.8770 after it couldn’t maintain gains above 0.8785, influenced by a strong UK manufacturing PMI report. This candlestick pattern, known as the evening star, indicates a possible change in market trends. As of Monday, the Euro is having a tough time holding its gains against the British Pound, with indicators hinting at a potential downward trend. UK’s October manufacturing PMI was revised to 49.7, showing some improvement but still in contraction. Meanwhile, the Eurozone’s manufacturing PMI hit 50.0, a slight increase from September’s 49.8. Germany’s PMI also saw a small rise, reaching 49.6 in October from 49.5 in September.

Bearish Candlestick Patterns

The daily candlestick chart shows a bearish evening star pattern, pointing to a possible trend reversal. The Euro is still above the mid-0.8700 range, but the RSI indicates it is losing momentum. The Euro might find support near the previous resistance at 0.8725, with important support zones between 0.8655 and 0.8665. Bullish attempts seem limited below 0.8785, while further resistance is near 0.8815. The Euro achieved minor gains against the Swiss Franc, marking its strongest daily performance. The currency heat map shows different strengths among major currencies, indicating mixed movements in the forex market. The Euro’s interaction with the US Dollar and other currencies is displayed with percentage changes. As of the market close on November 3rd, 2025, the bearish signals on the EUR/GBP chart are hard to overlook. The evening star pattern identified last week often suggests a peak, hinting that the Euro’s recent strength against the Pound may be fading. Consequently, strategies that benefit from a declining EUR/GBP rate should be explored in the next few weeks.

Potential Strategies and Economic Indicators

This technical outlook aligns with the strengthening UK economic data reflected in the revised manufacturing PMI figures for October 2025. Additionally, recent ONS data has shown that UK services inflation remains high at 4.2%, leading the Bank of England to adopt a hawkish stance. A proactive central bank generally supports its currency, giving the Pound a fundamental advantage. Conversely, the Eurozone is facing economic weaknesses, limiting the European Central Bank’s (ECB) aggressive actions. Last month’s disappointing German industrial production, which fell by 0.5% according to Destatis, justifies the ECB’s recent cautious stance on economic growth. For options traders, this scenario may present an opportunity to purchase put options on EUR/GBP, aiming for a move towards the 0.8700 support level. Reflecting on the price movements in mid-2024, we observed a similar situation where the pair fell below key support after a period of stability. Implied volatility for the pair has risen to 6.8% from 5.5% a month ago, indicating that the market anticipates a significant movement. Create your live VT Markets account and start trading now.

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