News and data reports from Australia, New Zealand and Japan are going to be hitting the market during the session. In terms of the move actively traded currency pairs during the Asia Pacific trading session this news and data affects their price action.
Much of the action during this session is focused on the Japanese Yen currency pairs because of the size of the Japanese market and the importance of Japanese data to the market. The Japanese financial centers are most active during this session so you can get a sense of what the Japanese market is doing based on price movements.
European financial centers begin to open up and the market gets to its full swing about midway through the Asian trading day. European financial centers and London represent over 50% of the total global trading volume.
London, Bonn, Paris, Zurich and Geneva are important financial centers that are active during the European trading session. The forex market interest and liquidity is at its peak during the European session The European session overlaps with half of the Asian trading day and half of the North American trading day.
London is the global forex center with the highest volume of foreign exchange transactions. As a result some of the biggest moves and the most active trading takes place in the European currencies (EUR, GBP and CHF) and the euro cross currency pairs (EUR/CHF and EUR/GBP).
The trading volumes are much bigger in the European Session because of the overlap between the North American and European trading sessions. Some of the biggest and most meaningful directional price movements take place during this crossover period.
The North American Session basically comprises New York and Chicago as financial centers. The North American trading session accounts for roughly the same share of the global trading volume as the Asia Pacific market, or about 22% of the daily global trading volume.
Most US data reports are released around 8:30 AM EST with others coming out later at around 9 AM and 10:00 AM EST. The North American morning is when US key economic data are released and the forex market makes many of its significant decisions on the value of USD.
Canadian economic data reports are also released between 7 and 9 AM EST. There are some US economic reports that come out at noon or at 2:00 PM EST livening up the New York afternoon market.
The London or European close can bring volatile flurries of activity. London and European financial centers begin to wind down their daily trading operations around noon eastern time each day.
Market liquidity and interest falls off significantly in the New York afternoon on most trading days. This is the best time for scalping as the market is moving sideways. Scalping is done when a trader enters and exits a trade within a few minutes in order to make just a few pips per trade. The ideal time for scalping is when the markets are moving sidways with very low volatility. On quiet days, the generally lower market interest typically leads to stagnating price action. This can make for challenging trading conditions but not for the scalpers.
