Because of the overlap between North American and
European trading sessions, the trading volumes are much
more significant. Some of the biggest and most meaningful
directional price movements take place during this crossover
period. On its own, however, the North American trading ses-
sion accounts for roughly the same share of global trading
volume as the Asia-Pacific market, or about 22 percent of
global daily trading volume.
The North American morning is when key U.S. economic data
is released and the forex market makes many of its most sig-
nificant decisions on the value of the U.S. dollar. Most U.S.
data reports are released at 8:30 a.m. ET, with others coming
out later (between 9 and 10 a.m. ET). Canadian data reports
are also released in the morning, usually between 7 and 9 a.m.
ET. There are also a few U.S. economic reports that variously
come out at noon or 2 p.m. ET, livening up the New York after-
noon market. London and the European financial centers
begin to wind down their daily trading operations around
noon eastern time (ET) each day. The London, or European
close, as it’s known, can frequently generate volatile flurries of
activity.
On most days, market liquidity and interest fall off signifi-
cantly in the New York afternoon, which can make for chal-
lenging trading conditions. On quiet days, the generally lower
market interest typically leads to stagnating price action. On
more active days, where prices may have moved more signifi-
cantly, the lower liquidity can spark additional outsized price
movements, as fewer traders scramble to get similarly fewer
prices and liquidity. Just as with the London close, there’s
never a set way in which a New York afternoon market move
plays out, so traders just need to be aware that lower liquidity
conditions tend to prevail, and adapt accordingly.
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