Jan 02 2022 0

The forex market is traded in sessions, which are the Tokyo session, the London session, and the New York session. Each trading session will have its own features, so in each session, there is a safest currency for you to trade. In this article, we will try to figure out what is the safest currency to trade in each period during the trading day.

Tokyo session

Here are some important things you should know about the Tokyo session:

  • Reaction is not limited only by domestic transactions. Tons of foreign exchange transactions occur in other financial centers like Hong Kong, Singapore and Sydney.
  • The main market participants during the Tokyo session were trading companies (exporters) and central banks. The Japanese economy depends heavily on exports with its major partner, China, and there are many daily transactions.
  • The liquidity sometimes is very thin.
  • You are likely to see stronger fluctuations in Asia Pacific currency pairs like AUD/USD and NZD/USD compared to GBP/USD.
  • During periods of thin liquidity, most pairs can get stuck in a range. This provides the opportunity for short-term transactions or initial breakouts of the day.
  • Most of the reaction will take place at the beginning of the session since much economic data is released.
  • Fluctuations in the Tokyo session can affect the whole day. Traders in the next session will look at what happened in the Tokyo session to evaluate strategy for another session.
  • After major fluctuations in the New York session, you can see the consolidation in the Tokyo session.

safest currency

What is the safest currency for the Tokyo session?

The Tokyo session is when data from Australia, New Zealand and Japan are published, so this is an opportunity to trade news events. This is also the time when the yen has more volatility. It should be noted that China is also an economic power so whenever news from China is published it tends to create turmoil. Australia and Japan are heavily dependent on Chinese demand, so we can see AUD and JPY pairs become more volatile when Chinese data is available.

London session

Here are some things to know about the London session:

  • Because the London session coincides with the other two trading sessions (and London is an important financial center), a large volume of transactions takes place during this period. Therefore high liquidity and lower transaction costs.
  • Due to the large trading volume, this session has the most volatility.
  • Most trends begin in the London session and will usually last until the New York session opens.
  • The volatile trend usually decreases in the middle of the session when traders go to lunch before the New York session begins.
  • Trends can sometimes reverse at the end of the London session as European traders can decide to lock in profits.

safest currency

What is the safest currency for the London session?

The trading volume was large, so there was a lot of liquidity in the session, which almost any pair could trade. It is best to trade major pairs like EUR/USD, GBP/USD, USD/JPY, USD/CHF as these pairs often have the highest spreads. However, these pairs are also directly affected by the data published in the u session. You can try cross yen (EUR/JPY and GBP/JPY) because they usually fluctuate a lot at this time. The spread difference may be slightly larger as these are cross pairs.

New York session

Here are some notes you need to know in New York session:

  • High liquidity in the morning because it coincided with the Au session.
  • Most economic reports are published near the beginning of the New York session. Remember, 85% of all transactions are related to the USD, so whenever important US economic data is released, the market is likely to experience temporary volatility.
  • Once the European market closes, liquidity and volatility tend to decline at the end of the session.
  • There was little fluctuation on Friday afternoon when Asian and European traders stopped trading.

safest currency

What is the safest currency for the New York session?

It should be noted that there was tons of liquidity when the US and Au sessions took place at the same time. This allows you to trade any pair, but it is best to trade major or minor pairs, and avoid strange pairs. In addition, people will focus on US data because the dollar is part of the main transactions.

In conclusion, a professional forex trader doesn’t trade just a single currency pair. So because you trade multiple pairs at a time, you should know what is the safest currency for each trading session. We hope this article has shown you the answer you’re looking for, and these are top 4 best forex pairs to trade.


Mario Draghi

Hey, I’m Mario Draghi. I’m a writer currently resided in Thailand. For my forex experience, I have been working with brokers and trading for 5 years. Hope that you'll enjoy my articles about all forex-related matters.

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