The forex market is a decentralized market that operates 24 hours a day, five days a week. The market is divided into three main sessions: the Asian, European, and North American sessions. The London session is one of the most important sessions in the forex market, and it takes place from 7:00 a.m. to 4:00 p.m. GMT (Greenwich Mean Time).
The London session is the largest and most volatile session in the forex market, accounting for over 30% of the daily trading volume. It is also known as the European session, as it overlaps with the opening of the European markets in Frankfurt and Paris.
The London session is known for its high liquidity and volatility, which makes it an attractive session for traders. The session is characterized by high trading volumes, which lead to tight bid-ask spreads and low transaction costs. This makes it easier for traders to enter and exit trades at the desired price.
During the London session, the major currency pairs such as EUR/USD, GBP/USD, USD/JPY, and USD/CHF are the most actively traded. These currency pairs are affected by the economic data releases from the Eurozone, the UK, and Switzerland, which are released during the session.
The London session is also characterized by the presence of major financial institutions, hedge funds, and other large players in the market. These players have a significant impact on the market, and their trading activities can cause large price movements in the currency pairs.
The London session is also known for its news announcements, which can have a significant impact on the market. The economic data releases such as the UK GDP, inflation, and employment data are closely watched by traders, as they can provide insights into the health of the UK economy and the direction of the Bank of England’s monetary policy.
The London session is also affected by the news announcements from the Eurozone, as the UK is a major trading partner with the Eurozone countries. The announcements such as the ECB interest rate decisions, Eurozone inflation, and GDP data can have a significant impact on the EUR/GBP and other Eurozone-related currency pairs.
In conclusion, the London session is one of the most important sessions in the forex market, and it operates from 7:00 a.m. to 4:00 p.m. GMT. The session is characterized by high liquidity, volatility, and trading volumes, which make it an attractive session for traders. The session is affected by the economic data releases from the UK and the Eurozone, as well as the news announcements from the major financial institutions and other large players in the market. As a result, traders need to be aware of the key events and news announcements during the London session to make informed trading decisions.
