Foreign Exchange Trading Session

Foreign exchange transactions take place 24 hours a day, 5 days a week around the world. The market opened Monday morning in Wellington, New Zealand, and remained open until Friday night in New York. Understanding which trading sessions are now active helps you select a trading currency pair and review the relevant financial events before you starts to trade.

Each trading day can be divided into three trading periods according to the activity of the financial centre in a specific period of time. The opening and closing time of each period is based on the local normal business working hours:

Asia (Tokyo, Japan) Session

The main trading centre is located in Tokyo. Asia session also includes China, Australia, and New Zealand. The first financial centre to open after the weekend is actually Wellington, New Zealand, while Tokyo capital market opened at 2AM EET (3AM EST). The closing time overlaps with the opening time of the European session.

Important economic data for the region that could affect the trades in European and US session is released during this period. You can expect significant price fluctuations in the US and Japan's USDJPY, Europe Japan's EURJPY and Australia Japan's AUDJPY.

Europe (London) Session

The closing of Asia financial centre marks the beginning of a new day for the European market. Due to the overlap of European time with Asia and American time, the foreign exchange market can usually see increased volatility and market liquidity, however, the spread is often smaller during the London time. The most important financial news is released by the Eurozone, the UK and Switzerland. Generally, trend will continue from the European session to the beginning of the New York session. Currency pairs with the most liquidity are EURUSD, EURUSD, GBPUSD, GBPCHF, USDCHF, GBPGBP, and EURCHF.

US (New York) Session

This session is led by the New York financial centre, but it also includes Canada and South America. Naturally, there was a lot of liquidity in the first half of the period, as the European market remained open. A series of economic indicators that have a profound impact on the market are released by the United States and Canada, so be sure to check the economic calendar in advance to follow upcoming news. Since most foreign exchange transactions involve the U.S. dollar, all major and cross exchange rates fluctuate during this period, but liquidity is also high at this period, and basically any currency pair can be traded.