CHAPTER 5
What Are the
Best Times to
Trade for
Individual
Currency Pairs?
T
he foreign exchange market operates 24 hours a day and as a result it
is impossible for a trader to track every single market movement and
make an immediate response at all times. Timing is everything in cur-
rency trading. In order to devise an effective and time-efficient investment
strategy, it is important to note the amount of market activity around the
clock in order to maximize the number of trading opportunities during a
trader’s own market hours. Besides liquidity, a currency pair’s trading
range is also heavily dependent on geographical location and macroeco-
nomic factors. Knowing what time of day a currency pair has the widest or
narrowest trading range will undoubtedly help traders improve their in-
vestment utility due to better capital allocation. This chapter outlines the
typical trading activity of major currency pairs in different time zones to
see when they are the most volatile. Table 5.1 tabulates the average pip
range for the different currency pairs during various time frames between
2002 and 2004.
ASIAN SESSION (TOKYO): 7 P.M.–4 A.M. EST
FX trading in Asia is conducted in major regional financial hubs; during the
Asian trading session, Tokyo takes the largest market share, followed by
Hong Kong and Singapore. Despite the flagging influence of the Japanese
central bank on the FX market, Tokyo remains one of the most important
63
, TABLE 5.1 Currency Pair Ranges
64
European U.S. & Europe Europe &
Currency Pairs (EST) Asian Session Session U.S. Session Overlap Asia Overlap
7 P.M.–4 A.M. 2 A.M.–12 A.M. 8 A.M.–5 P.M. 8 A.M.–12 P.M. 2 A.M.–4 A.M.
EUR/USD 51 87 78 65 32
USD/JPY 78 79 69 58 29
GBP/USD 65 112 94 78 43
USD/CHF 68 117 107 88 43
EUR/CHF 53 53 49 40 24
AUD/USD 38 53 47 39 20
USD/CAD 47 94 84 74 28
NZD/USD 42 52 46 38 20
EUR/GBP 25 40 34 27 16
GBP/JPY 112 145 119 99 60
GBP/CHF 96 150 129 105 62
AUD/JPY 55 63 56 47 26
What Are the
Best Times to
Trade for
Individual
Currency Pairs?
T
he foreign exchange market operates 24 hours a day and as a result it
is impossible for a trader to track every single market movement and
make an immediate response at all times. Timing is everything in cur-
rency trading. In order to devise an effective and time-efficient investment
strategy, it is important to note the amount of market activity around the
clock in order to maximize the number of trading opportunities during a
trader’s own market hours. Besides liquidity, a currency pair’s trading
range is also heavily dependent on geographical location and macroeco-
nomic factors. Knowing what time of day a currency pair has the widest or
narrowest trading range will undoubtedly help traders improve their in-
vestment utility due to better capital allocation. This chapter outlines the
typical trading activity of major currency pairs in different time zones to
see when they are the most volatile. Table 5.1 tabulates the average pip
range for the different currency pairs during various time frames between
2002 and 2004.
ASIAN SESSION (TOKYO): 7 P.M.–4 A.M. EST
FX trading in Asia is conducted in major regional financial hubs; during the
Asian trading session, Tokyo takes the largest market share, followed by
Hong Kong and Singapore. Despite the flagging influence of the Japanese
central bank on the FX market, Tokyo remains one of the most important
63
, TABLE 5.1 Currency Pair Ranges
64
European U.S. & Europe Europe &
Currency Pairs (EST) Asian Session Session U.S. Session Overlap Asia Overlap
7 P.M.–4 A.M. 2 A.M.–12 A.M. 8 A.M.–5 P.M. 8 A.M.–12 P.M. 2 A.M.–4 A.M.
EUR/USD 51 87 78 65 32
USD/JPY 78 79 69 58 29
GBP/USD 65 112 94 78 43
USD/CHF 68 117 107 88 43
EUR/CHF 53 53 49 40 24
AUD/USD 38 53 47 39 20
USD/CAD 47 94 84 74 28
NZD/USD 42 52 46 38 20
EUR/GBP 25 40 34 27 16
GBP/JPY 112 145 119 99 60
GBP/CHF 96 150 129 105 62
AUD/JPY 55 63 56 47 26
