These Are the Best Hours to Trade the Euro

The euro trades continuously from Sunday evening to Friday afternoon in the U.S., with volume and volatility peaking during active periods, particularly in the highly liquid EUR/USD pair. However, there are other EUR pairs. In this article, we’ll look at those pairs, when it might be best to trade the euro, and what some catalysts are to invoke those times.

Key Takeaways

• The euro (EUR) is the second most liquid currency in the world, following the U.S. dollar (USD), with traders speculating on its strength through various currency pairs.
• The six most popular EUR pairs are EUR/USD, EUR/CHF, EUR/JPY, EUR/GBP, EUR/AUD, and EUR/CAD, which are actively traded from Sunday evening to Friday afternoon in the U.S.
• Forex traders typically focus on the EUR/USD pair due to its liquidity and tight spreads, with trading strategies working well during active periods when price movements are more predictable.
• Key catalysts for euro price movements include economic data releases, central bank announcements, and macro events that affect multiple markets, such as political developments or natural disasters.
• The best times to trade the euro align with major economic releases and the open hours of equity and futures exchanges, ensuring high volume and liquidity during peak periods.

Understanding Euro Pairs

The euro (EUR) ranked second behind the U.S. dollar (USD) in terms of global liquidity at the time of publication, trailed by the Japanese yen (JPY) and British Pound (GBP). Forex traders speculate on EUR strength and weakness through currency pairs that establish comparative value in real-time.

Although brokers offer dozens of related crosses, most clients focus their attention on the six most popular pairs:

• U.S. dollar (USD) – EUR/USD
• Swiss franc (CHF) – EUR/CHF
• Japanese yen (JPY) – EUR//JPY
• British Pound (GBP) – EUR/GBP
• Australian dollar (AUD) – EUR/AUD
• Canadian dollar (CAD) – EUR/CAD

Best Hours to Trade

EUR trades continuously from Sunday evening to Friday afternoon in the United States, offering significant profit opportunities. However, volume and volatility can fluctuate greatly in each 24-hour cycle, with bid/ask spreads in the less popular pairs widening during quiet periods and narrowing during active periods. While the ability to open and close positions at any time marks a key benefit of forex, the majority of trading strategies unfold during active periods.

Many forex traders focus their full attention on the EUR/USD cross, the most popular and liquid currency market in the world. The cross maintains a tight spread throughout the 24-hour cycle, while multiple intraday catalysts ensure that price actions will set up tradable trends in both directions and along all time frames. Long- and short-term swings also work extremely well with classic range-bound strategies, including swing trading and trading channels.

Euro Price Catalysts

The best time to trade the euro coincides with the release of economic data, as well as the open hours at equity, options, and futures exchanges. Planning ahead for these data releases requires two-sided research because local (eurozone) catalysts can move popular pairs with the same intensity as catalysts in each of the cross venues. Moreover, U.S. economic data can have the greatest impact on all currencies, due to the overriding importance of the EUR/USD pair.

In addition, EUR crosses are vulnerable to economic and political macro events that trigger highly correlated price actions across equities, currencies, and bond markets worldwide. It’s an older example, but China’s yuan devaluation in August 2015 offers a perfect illustration. Even natural disasters can generate this type of coordinated response, as evidenced by the 2011 Japanese tsunami.

Economic Releases

Eurozone monthly economic data is generally released at 2 a.m. Eastern Time (ET) in the United States. The time segment from 30 to 60 minutes before these releases and one to three hours afterward highlights an enormously popular period to trade EUR pairs because the news will impact at least three of the five most popular crosses. It also overlaps the run-up into the U.S. trading day, drawing in significant volume from both sides of the Atlantic.

U.S. economic releases tend to be released between 8:30 a.m. and 10 a.m. ET and generate extraordinary EUR trading volume as well, with high odds for strongly trending price movement in the most popular pairs. Japanese data releases get less attention because they tend to come out at 4:30 p.m. and 10 p.m. ET when the eurozone is in the middle of its sleep cycle. Even so, trading volume with the EUR/JPY and EUR/USD pairs can spike sharply around these time zones.

Advisor Insight

The FOMC releases are published on the Fed’s website exactly at a scheduled time.

Euro and Equity Exchange Hours

The schedules for many EUR traders roughly follow exchange hours, centering their activity when the Frankfurt and New York equity markets and Chicago futures and options markets are open for business. This localization generates an increase in trading volume around midnight on the U.S. East Coast, continuing through the night and into the American lunch hour when forex trading activity can drop sharply.

However, central bank agendas shift this activity cycle, with forex traders around the world staying at their desks when the Federal Reserve (FOMC) is scheduled to release a 2 p.m. ET interest rate decision or the minutes of the prior meeting. The Bank of England (BOE) issues its rate decisions at 7 a.m. ET, while the European Central Bank (ECB) follows at 7:45 a.m. ET, with both releases taking place in the center of high-volume EUR activity.

What Are the Most Popular Euro Currency Pairs for Forex Trading?

Some of the most popular euro currency pairs include EUR/USD, EUR/CHF, EUR/JPY, EUR/GBP, EUR/AUD, and EUR/CAD. These pairs attract the highest trading volumes due to their liquidity and frequent market activity. Traders prefer these pairs because they provide tighter bid/ask spreads and clearer price trends.

Why Is the EUR/USD Pair Considered the Most Liquid Forex Market?

The EUR/USD pair is the most traded forex market globally as it benefits from the economic strength and influence of both the eurozone and the United States. Its high liquidity also usually means it has narrow bid/ask spreads and efficient pricing.

What Are the Best Hours to Trade the Euro in the U.S. Time Zones?

One potential “best time” to trade if you’re looking for higher volatility could be times of major press releases. Key economic data releases at 8:30 a.m., and 10 a.m. ET (ignoring other times outside of usual trading hours) creates additional opportunities for significant price movement. 

Is the Lunch Hour the Best Time to Trade?

There’s no single straightforward answer here that will cover every trading day. However, generally speaking, trading volume typically decreases during the lunch hour as market participants step away. This lull often results in reduced volatility and narrower price movements. However, significant news or announcements can still create short-term spikes in activity; if anything, days with more “exciting” news may experience higher volatility during this period.

The Bottom Line

Six popular currency pairs offer euro traders a wide variety of short- and long-term opportunities. The best times to trade these instruments coincide with key economic releases at 1:30 a.m., 2 a.m., 8:30 a.m., and 10 a.m. U.S. Eastern Time, as well as between midnight and noon, when European and American exchanges keep all cross markets active and liquid.