You cannot have overlap events of PopcornFX particles in UE4.
But to create the effect you describe, you could use Spatial Layers, which is a way to make particle-to-particle iterations.
For example, you can create an "Element" Spatial Layer where you'll insert your fire and water particles Position along with an "ElementID" to distinguish between fire and water. Then you can make each particle query/sample this spatial layer to react to nearby particles depending on their "ElementID".
Here are reference material on Spatial Layers:
- Spatial Layer documentation: https://wiki.popcornfx.com/index.php/CParticleSpatialDescriptor
- There are a few pkfx examples in the Release Highlight pack (demonstrated here: https://youtu.be/0FFku3Hs17c?t=267
- The UE4 PopcornFX Example Project's butterflies use Spatial Layer to burn/electrify/magic etc...
- The Plasma Ball tutorial uses Spatial Layer for another effect, but can help anyway: https://www.youtube.com/watch?v=JbvG9ufPMOs