Forex trading is a global market that operates 24 hours a day, five days a week. The market is divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. Each session has unique characteristics, including the forex pairs that are traded during that time.
In this article, we will discuss which forex pairs are traded during each session and why traders should be aware of these pairs.
Sydney Session:
The Sydney session is the first trading session of the day and opens at 10:00 PM GMT on Sunday night. This session is the least volatile of all the trading sessions, with low trading volumes. The forex pairs that are traded during this session are the AUD/USD, NZD/USD, and AUD/JPY. These pairs are also known as the “commodity pairs,” as they are heavily influenced by commodity prices, particularly gold and oil.
Traders who focus on the Sydney session should monitor economic data releases from Australia and New Zealand, as they can impact the value of the AUD and NZD.
Tokyo Session:
The Tokyo session, also known as the Asian session, opens at 12:00 AM GMT and is characterized by high volatility, particularly during the first few hours of trading. The forex pairs that are traded during this session are the USD/JPY, EUR/JPY, and AUD/JPY. These pairs are heavily influenced by the Bank of Japan’s monetary policy, economic data releases from Japan, and news events from across Asia.
Traders who focus on the Tokyo session should pay attention to the Bank of Japan’s interest rate decisions, as well as economic data releases from Japan, China, and other Asian countries.
London Session:
The London session is the most active trading session, with the highest trading volumes. This session opens at 8:00 AM GMT and overlaps with the Tokyo session for several hours, leading to increased volatility. The forex pairs that are traded during this session are the EUR/USD, GBP/USD, USD/CHF, and EUR/GBP.
The London session is heavily influenced by economic data releases from Europe and the UK, as well as news events from across the globe. Traders who focus on the London session should be aware of the European Central Bank’s monetary policy decisions, as well as economic data releases from the UK, Germany, France, and other European countries.
New York Session:
The New York session is the final trading session of the day and opens at 1:00 PM GMT. This session is characterized by high volatility, particularly during the first few hours of trading as it overlaps with the London session. The forex pairs that are traded during this session are the USD/CAD, USD/JPY, EUR/USD, GBP/USD, and AUD/USD.
The New York session is heavily influenced by economic data releases from the US, as well as news events from across the globe. Traders who focus on the New York session should pay attention to the Federal Reserve’s interest rate decisions, as well as economic data releases from the US and Canada.
Conclusion:
Forex trading operates 24 hours a day, five days a week, and is divided into four major trading sessions. Each session has unique characteristics and forex pairs that are traded during that time. Traders who focus on a particular session should be aware of the forex pairs that are traded during that time, as well as the economic data releases and news events that can impact those pairs.
By understanding the forex pairs that are traded during each session, traders can develop a more effective trading strategy and increase their chances of success in the global forex market.
