The preliminary US S&P Global Purchasing Managers’ Index (PMI) data for October will be released at 13:45 GMT. The report is expected to indicate moderate growth in private sector business activity. The Manufacturing PMI is forecasted to remain steady at 52.0, while the Services PMI is expected to decline from 54.2 in September to 53.5.

EUR/USD is currently trading just above 1.1600, exhibiting a sideways trend within a Symmetrical Triangle chart pattern. The chart’s upper bound is around 1.1920 and the lower bound near 1.1390. The pair is close to the 20-day Exponential Moving Average, reflecting indecisiveness, with the Relative Strength Index oscillating within the 40.00-60.00 range, indicating reduced volatility.

US Services PMI Overview

The S&P Global Services PMI is a key indicator of the US services sector’s business activity. It reflects changes month-on-month, predicting trends in economic indicators such as GDP and employment. A reading above 50 suggests expansion, supporting the US Dollar, while below 50 indicates contraction, which can weaken the USD. The next release is scheduled for October 24, 2025, with a consensus at 53.5, following a previous reading of 54.2.

With the US Flash PMI data for October just released, we see that the numbers have missed expectations. The Services PMI came in at 52.8 against a forecast of 53.5, and the Manufacturing PMI printed 51.5, below the steady 52.0 that was anticipated. This suggests that economic activity is cooling more than we previously thought.

This weaker data adds to growing concerns about an economic slowdown, especially after the softer GDP growth numbers from earlier in 2025, which came in below 2%. For weeks, the Federal Reserve has maintained a data-dependent stance following the persistent inflation concerns of 2024. This new data point could cause the market to price in a more dovish Fed in the coming months.

Technical Analysis and Strategy

For derivative traders, this is a clear signal that the low volatility in EUR/USD could be about to end. The pair has been stuck in a tight range near the 20-day EMA, but this economic surprise provides a catalyst for a potential breakout from its Symmetrical Triangle pattern. We should prepare for a significant move.

Given the dollar-negative data, the path of least resistance for EUR/USD is likely upwards. We can consider buying near-term call options with a strike price above the October 17 high of 1.1728. This strategy allows us to profit from a potential rally towards 1.1920 while limiting our downside risk to the premium paid.

However, we must also consider the risk of a reversal if subsequent data paints a different picture. To manage this, placing protective put options below the key 1.1542 support level could be a prudent hedge. This provides a safety net in case market sentiment shifts and the dollar unexpectedly strengthens.

Looking at historical patterns, a breakout from a multi-month consolidation pattern, like the one we’ve seen since August, often leads to a sustained trend. Therefore, a confirmed move above 1.1728 in the coming days could set the tone for EUR/USD for the remainder of the year. Traders should be ready to act on this potential shift in momentum.

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