Popular times to trade EUR/USD

European and US trading session overlap

The European and US trading sessions overlap between 1pm and 4pm UK time (10pm to 1am AEST). Foreign exchange markets are open 24 hours a day, five days a week. EUR/USD is open from 6am Monday all the way through until 7am Saturday AEST.

With us, you can even trade EUR/USD on a CFD trading account almost 24 hours a day, seven days a week* using our weekend EUR/USD market. However, the most popular times to trade EUR/USD (or any currency pair) is when it is most active – when the highest volume and number of transactions are taking place. When there is more volume, there is increased liquidity and higher volatility. These create larger moves in the price of EUR/USD and more trading opportunities

While volatility changes over time, the most volatile hours don’t change too much. This means that the common time to trade the EUR/USD pair is in this 1pm to 4pm UK time window (10pm to 1am AEST).¹

Economic data releases and central bank announcements in both the Eurozone and the United States impact the EUR/USD currency rate because they can generate increased volumes in trading. For the US, its main economic data releases are announced between 1pm and 4pm UK time, but there’s an important exception. The Federal Reserve's announcement on interest rates is released at 7pm UK time (4am AEST) and this event typically creates an increase in volatility and trading activity.

Factors affecting the EUR/USD exchange rate

The EUR/USD exchange rate, like all foreign exchange trading, is impacted by macroeconomic, geopolitical and central bank factors.

Economic data

Economic data releases can impact the price of the EUR/USD currency pair, as they indicate potential strengths or weaknesses in the underlying economy. A strengthening economy usually leads to a higher currency, as it may influence growth or interest rate expectations. Inflation, balance of payments, employment and GDP are some of the important data releases. The Eurozone includes countries like Germany, France, Spain and Italy. Each country releases their economic data separately, so there are a large number of data points that need to be monitored.

Political events

Geopolitical events can impact the EUR/USD exchange rate. For example, when Russia invaded Ukraine, Europe was heavily reliant on Russian gas as a source of energy. The increased cost of power and energy across Europe, along with a growing concern that factories in Germany may be forced to shutter operations over the winter, led to a sharp sell-off in the EUR/USD rate because the US economy was less reliant on Russia for its energy supplies.

Elections and government policy decisions can have a large impact too. After an election, a new leader may implement an election manifesto that alters the outlook for the economy. For example, it could involve large public spending plans that require large-scale deficit financing or a sharp increase in taxation. Any policy that changes the outlook for growth can have a material impact on the level of its currency.

Central bank announcements

Decisions made by the two central banks – the Federal Reserve (Fed) and European Central Bank (ECB) – on interest rates and accompanying statements are important drivers of the EUR/USD exchange rate. Interest rates, in particular, are one of the most important influencers.

There is usually increased volume and volatility in the price of the EUR/USD exchange rate when the Fed or ECB announces an interest rate decision. A higher interest rate can attract more foreign capital to that currency, as it offers a higher return. The opposite is also true – a lower interest rate tends to see a decrease in the exchange rate.

Risk management strategies

It is important to carefully manage your risk when trading forex CFDs.

Do your research

You need to ensure that you build up knowledge about the factors that impact the EUR/USD exchange rate, including potential catalysts and upcoming events and data releases. You can use the IG Academy to help improve your understanding of trading and consult our economic calendar for upcoming data releases.

Manage your position size

You need to be aware of the impact of leverage on your profits and losses. Your total risk isn't limited to your initial outlay and gains and losses will be based on the full trade value. Correctly sizing your position should ensure that any losses sustained are manageable.

Decide on your exit points

Managing your risk should include choosing your exit points. You can use stop and limit orders to set specific levels to enter and exit positions. Stops can limit your potential losses and protect your profits. Following a disciplined trading plan can help reduce emotion in decision-making.

How do I start trading EUR/USD?

1. Open a CFD trading account or log in
2. Select EUR/USD from the list of forex pairs
3. Decide whether to sell or buy
4. Take steps to manage your risk
5. Open and monitor your position

Remember, CFDs are leveraged products that let you trade on price movements without owning the underlying asset. Leverage means both profits and losses can be magnified significantly – you could lose more than your initial deposit.

Popular times to trade EUR/USD summed up

• The most popular time to trade EUR/USD typically is between 1pm and 4pm UK time (10pm to 1am AEST) when the European and US trading sessions overlap. This is because EUR/USD trades with the highest liquidity and volatility during that time, creating the most trading opportunities
• Economic data releases, geopolitical events and central bank announcements may all impact the transaction volume and volatility in the EUR/USD exchange rate
• Carefully managing your risk is key when trading EUR/USD as you are using leverage
• You can open a EUR/USD position with a live CFD trading account or practise trading the pair with our demo account

¹ Best Time to Day Trade the EUR/USD Forex Pair – Balance Money
* 24/7 includes all week apart from ten hours from 10pm Friday to 8am Saturday (UK time), and 20 minutes just before the market opens on Sunday.