The foreign exchange (forex) market is the largest financial market in the world, with over $5 trillion traded every day. As a 24-hour market, forex trading is divided into different sessions, each starting and ending at different times. The two main forex trading sessions are the European session and the American session. In this article, we’ll take a closer look at when the euro/american session starts in forex.
The forex market operates 24 hours a day, five days a week, starting from 5 pm EST on Sunday and closing at 5 pm EST on Friday. However, this doesn’t mean that all forex sessions are created equal. In fact, the forex market is divided into three main trading sessions: the Asian session, the European session, and the American session. Each of these sessions is characterized by different trading volumes, volatility, and liquidity.
The European session is the first major session of the day, and it starts at 2 am EST and ends at 11 am EST. This session is also referred to as the London session, as it overlaps with the opening of the London stock exchange. The European session is the most active session of the day, with more than 50% of all forex transactions occurring during this time. This is due to the fact that many of the world’s major financial centers are located in Europe, including London, Frankfurt, and Paris.
The American session, also known as the New York session, is the second major session of the day, and it starts at 8 am EST and ends at 5 pm EST. This session overlaps with the European session for a few hours, creating a period of high liquidity and volatility. The American session is the second most active session of the day, accounting for around 20% of all forex transactions.
The euro/american session, also known as the euro/US overlap, is the period when the European session and the American session overlap. This is the most active and volatile period of the day, as market participants from both sides of the Atlantic are active at the same time. The euro/american session starts at 8 am EST and ends at 11 am EST.
During the euro/american session, traders can expect higher trading volumes, tighter spreads, and increased volatility. This is because market participants are reacting to news releases, economic data, and other market-moving events that occur during this period. For example, if the European Central Bank (ECB) announces a change in its monetary policy during the European session, traders in the American session will react to this news when the euro/american session starts.
The euro/american session is also an important period for traders who use technical analysis. This is because the increased liquidity and volatility during this period can create favorable trading conditions, such as breakouts and trend reversals. Traders who use technical indicators, such as moving averages and oscillators, can use the euro/american session to confirm or reject their trading signals.
In conclusion, the euro/american session is the most active and volatile period of the day in the forex market. It starts at 8 am EST and ends at 11 am EST, overlapping with both the European session and the American session. Traders can expect higher trading volumes, tighter spreads, and increased volatility during this period, making it an important time for trading. Whether you are a fundamental trader or a technical trader, understanding the euro/american session is crucial to success in the forex market.