Forex trading is a 24-hour market that is open from Monday to Friday, providing traders with ample opportunities to make profits. However, certain trading sessions are more active than others, and it is important to know which currency pairs are best to trade during these sessions.
The London session is one of the most active sessions in the forex market, and it overlaps with the Asian and New York sessions. It begins at 8:00 am GMT and lasts until 4:00 pm GMT. During this period, traders can expect high volatility and liquidity, making it an ideal time to trade.
Here are some of the best currency pairs to trade during the London session:
The EUR/USD is the most widely traded currency pair in the forex market, and it is a popular choice for traders during the London session. This pair accounts for 27% of the daily forex trading volume, and it is known for its tight spreads and high liquidity. The Eurozone and the United States are both major economic powerhouses, making this pair highly responsive to economic data and news releases.
The GBP/USD is another popular currency pair that is heavily traded during the London session. It is known for its high volatility and can experience large price movements, making it a favorite among traders looking to make quick profits. The UK and the US are both major players in the global economy, and the pair is heavily influenced by economic data releases and political events.
The USD/JPY is a favorite currency pair for traders during the London session due to its high liquidity and tight spreads. Japan is a major exporter, and the US is a major importer, making this pair highly sensitive to economic data releases related to trade. The Bank of Japan and the Federal Reserve also play a significant role in shaping the value of this pair.
The EUR/GBP is a popular currency pair for traders looking to take advantage of the relationship between the Eurozone and the UK. The pair is highly responsive to economic data releases from both regions, and it can experience significant price movements during the London session. This pair is also known for its tight spreads and high liquidity.
The EUR/JPY is a highly volatile currency pair that is heavily traded during the London session. The pair is influenced by economic data releases from both the Eurozone and Japan, as well as political events and central bank policies. Traders who are comfortable with high-risk trades often choose this pair due to its potential for large profits.
In conclusion, the London session is a highly active and volatile trading session that provides traders with ample opportunities to make profits. The best currency pairs to trade during this session are those that have high liquidity, tight spreads, and are highly responsive to economic data releases and political events. The EUR/USD, GBP/USD, USD/JPY, EUR/GBP, and EUR/JPY are among the most popular currency pairs to trade during the London session.