Liquidity, geographical location, and macroeconomic factors impact a currency pair’s trading range. Knowing what time of day a currency pair is the most or least volatile will help you improve your capital allocation. “Trading around the clock, part I” (Currency Trader, November 2005) analyzed the characteristics of the Asian and European trading sessions. The following analysis outlines the typical trading activity of major currency pairs in the U.S. forex session.
It shows the average pip range for the different currency pairs during various time frames between 2002 and 2004. All sessions are described in terms of U.S. Eastern Standard Time (ET).
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