After the opening of Tokyo, news from Australia, New Zealand and Japan will flood the market, which provides a good opportunity for investors who are good at news trading. At the same time, the fluctuation of the yen will be greater during this period, because with the expansion of business activities of Japanese companies, more yen will change hands during this period.
In addition, China ’s role as an economic giant cannot be underestimated, so when major economic data from China is released, the market will usually experience large fluctuations. As the Australian and Japanese economies are heavily dependent on Chinese demand, when the Chinese economic data is released, the Australian dollar and Japanese yen currency pair will be more volatile (Yuhui International Net Note: For example, China ’s gross domestic product (GDP), trade Data and capital market conditions, etc.).
London trading hours
Just as Asian market participants are preparing to close the market for work, their European counterparts have only just begun a day of life and work.
Although there are many financial centers in Europe, the London market is still the focus of everyone ’s attention. And Paris only account for about 3%).
Thanks to its strategic location, London has historically been one of the centers of international trade. It is no surprise that London is called the “world of foreign exchange funds”, because every minute on the London market, there are tens of thousands of traders or businessmen trading. Approximately 30% of the world’s foreign exchange trading volume occurs during the London session.
The following are the main characteristics of the European session:
★ Due to the two major trading hours of Tokyo and New York during London time, and because London is a key global financial center, the volume of foreign exchange transactions conducted during this time is huge. This leads to higher liquidity in the market and lower potential transaction costs (exchange agent’s note: in London and New York trading hours, due to sufficient liquidity, currency pair trading spreads are generally lower than Tokyo time);
★ Due to the large amount of transactions generated during the London time period, this time period is usually also the most volatile market period;
★ Most market trends start in the London session, and they will usually continue until the beginning of the New York session;
★ There is almost no fluctuation in the mid-market of the London session, because traders usually leave the trading table for lunch at this time, and wait for the opening of the New York session;
★ The market trend may be reversed at the end of the London session, as traders from Europe may intend to carry out profit-taking operations.
Which currency pair should you choose to trade?
Due to the huge market liquidity during the European session, this session is suitable for trading in almost any currency pair.
Of course, the most ideal currency pairs are EUR / USD, GBP / USD, USD / JPY and USD / CHF, because the spread between these currency pairs is the lowest.
At the same time, these currency pairs are usually directly influenced by market news factors during European hours.
You can also trade Japanese Yen currency pairs, usually EUR / JPY and GBP / JPY, because the Japanese Yen currency pair fluctuates greatly during this period. However, because they are cross currency pairs, the spread will be larger.
New York trading hours
Just after European traders returned from the lunch break, the US market opened at 8:00 AM Eastern time, and investors began to enter the office one after another. Just like the Asian and European markets, the US market also has a major financial center. Of course it is New York! It is where the dream begins!
The following is the spread range of major currency pairs in New York time:
★ The market liquidity is higher in early trading, because this period overlaps with the European period;
★ The vast majority of reports are published near the opening of New York time. Remember, about 85% of all transactions involve the US dollar, so no matter when the US economic data is released, it may cause market volatility;
★ Once the European market closes, market liquidity and volatility will be greatly reduced in the afternoon of the US time;
★ The volatility at the end of the New York session on Friday is very small, because traders from Asia start to spend the weekend, and European traders also start watching football matches;
★ Also on Friday, there is a possibility of a reversal in the market in the second half of the New York session, because before the weekend, traders from the United States chose to close their positions in order to reduce their possible risk exposure due to the influence of weekend news factors .