Best Pairs to Trade during London Session

7 Best Pairs to Trade during London Session

The Forex market majors in the exchange of currencies, and the London or European session is a major stakeholder in the global forex market. It lies between the Asian and new York session- ensuring a smooth 24 hours trade. 

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As the median market, beginning at the close of the Asian session, London trading session is the largest and most volatile forex session in the popular 3 session market. It records an estimate of 35% transactions- leading to a sizable market volume. 

Due to its market volume, liquidity and favourable time zone, London session is preferred by most private traders. This is because of its low spread and high profit potential. 

Additionally, the New York market is time elapsed with heavy traffic- and major financial wins for traders.

The forex market trades currencies against each other which are described as currency pairs. Currency pair refers to the value between two currencies. For instance, EUR/USD where 1 EUR may be equivalent to 1.2 USD. Traders predict market movement, transact these currency pairs and wait for their potential wins.

So, for you to maximize the opportunities in the London session, and quickly take profit,  we have compiled 7 Best Pairs to Trade during the London Session. 

Does the potential of more wins excite you? We know it does, Read on!

7 Best Pairs to Trade in London Session

  1. THE EUR/USD
  2. THE USD/JPY
  3. THE GBP/USD
  4. THE AUD/USD
  5. THE USD/CAD
  6. THE USD/CHF
  7. THE EUR/JPY
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Best Pairs to Trade in London Session

1. EUR/USD

This currency pair is the favourite pair of most forex traders because of its low spread and relative stability. 

Euro and USD represent the most stable global economies with high reserve currencies. Considering that the Euro and USD are the two major global currencies, this currency pair is involved in one-fifth of the global forex market. 

Almost half of the European countries use Euro while USD is the central global currency. Due to their connection to the world economy, these currencies are influenced by regional political and commercial activities e.g war, tech boom and others.  

Hence, traders often interact with global news before making trade decisions. 

Beginners with little capital can use this pair to get frequent profits and actively learn about the forex market. Generally, its low spread ranges from 0.1 to 5 pips making it ideal for forex scalping where traders try to profit from small changes in price by buying and selling securities at low cost. 

Traders Tip: EUR/USD shares similar movement (positive correlation) with GBP/USD but opposite movement (negative) with USD/CHF pair.

2. USD/JPY

This process reveals how the Japanese Yen(JPY) is needed to buy USD. In this process, USD stands as the domestic currency and JPY stands as the counter currency. Japanese Yen remains the third most traded currency after Euro and USD.

With an estimated 13% trading volume, USD/JPY records high liquidity and transactions. Japan’s low interest rate also makes this pair appealing to traders especially when there might be a market crisis e.g. the great US repression of 2007 to 2009 .

Since Japan is a major exporter, traders should eye this currency pair in the equity market. Notably, the best time to trade USD/JPY  is 1PM to 4PM GMT. 

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Traders Tip: USD/JPY movement favours Oil price, the US Treasury bill, USD/CHF and USD/CAD.

3. GBP/USD

This currency pair is the third largest forex pair featuring in 10% of the global forex market. GBP/USD witnesses low spread, high volatility and swift price changes.

This makes it attractive to professional traders but in comparison to EUR/USD, the stakes are higher. Huge profits and losses could be recorded within seconds. 

Short term traders tend to favour this trade pair because of its pip shifts and price movements. Traders can jump on this trade from 12 noon to 3PM GMT

Like EUR/USD, which are owned by strong economies, GBP/USD matches the requirements for forex scalping. Furthermore, their regulatory bodies i.e Bank of England and Fed share similar operations. This further improves the progress of this pair. 

Traders Tip: GBP/USD is positively connected to EUR/USD due to their European history.

4. Best Pairs to Trade during London Session: AUD/USD

AUD/USD is one of the top five most traded currency pairs in the global forex. Due to the export and import history of Australia, AUD is regarded as a commodity currency. 

This trade pair is responsible for about 5% of the global forex trade. The production of Australian commodities, China market movement and interest rate influences this pair. 

Long term traders tend to work with this pair at the peak of the London and New York session.

Traders Tip: AUD/USD experience opposite market movement with USD/CHF or USD/CAD. 

5. USD/CAD

This currency pair is also called the loonie, because of the Canadian dollar coin which bears the same name. 

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CAD is one of the world reserve currencies which makes it a favourite currency among traders. Its closeness to the USD also adds to its appeal.

The price rate of USD/CAD can dip or rise according to Canadian commodity prices, Interest rates and the influence of the Fed. 

Like all US related trading pairs, USD/CAD reaches its peak and experiences high market volume when the London and New York session meets. 

Traders Tip: This trading pair experiences negative movement with GBP/USD and AUD/USD

6. USD/CHF

    CHF is the Switzerland currency code. The CH stands for Switzerland’s old latin name while the F signifies Franc. 

    Hence CHF or the Swiss Franc represents the Switzerland economy which is relatively stable. Due to its neutral state during wars, CHF is considered a safe currency. 

    Short term traders should do a technical analysis before they jump on this trade pair.

    Traders Tip: Negative correlation with EUR/USD.

    7. EUR/JPY

    If you are familiar with the Euro and Japanese Yen– i.e traded each currency against other ones- this pair is for you. EUR/JPY tend to have low spreads and wide market fluctuations. Losses are reduced and profits maximised because of the spread. 

    Breakout Trading and Scalping thrive with this pair.  You could watch the market movement around 2:30pm GMT.

    Traders Tip: EUR/JPY shares similar movement with USD/CHF, GBP/JPY and most  pairs where JPY is the Quote currency. 

    Conclusion

    The right trading pair determines your profit or loss in the forex market. Whether day trading or long term trading, low liquid or high liquid pairs, the London session accommodates all your trading strategies. 

    The pairs listed above constitute the 7 best Pairs to Trade during London Session. So, conduct your analysis and watch the news. While you are at it, consider your risk tolerance, trading strategy and favourite volatility before picking a pair. Happy Trading! 

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