Core Insights - The article outlines the liquidity, participants, and driving logic of the global foreign exchange market across different trading sessions, emphasizing the principle of "trading local currency in local time" and identifying suitable currency pairs for each session [1][2][3][4][5][6] Asian Session (9:00-15:00) - Core drivers include economic data from Japan, Australia, and New Zealand, as well as capital flows in the Asia-Pacific region and central bank interventions, particularly from the Bank of Japan [1] - Suitable currency pairs are primarily Japanese and Australian/New Zealand currencies, with main pairs being USD/JPY, EUR/JPY, and GBP/JPY, and secondary pairs including AUD/USD and NZD/USD [1] - Trading characteristics show lower overall liquidity and narrower volatility, with Japanese cross pairs influenced by Japan's fundamentals and risk sentiment [1] Overlap of Asian and European Sessions (15:00-18:00) - Core drivers consist of European funds entering the market and initial data from the Eurozone, along with European Central Bank communications [2] - Suitable currency pairs are mainly European currencies, with primary pairs being EUR/USD, GBP/USD, and EUR/GBP, and secondary pairs including EUR/JPY and GBP/JPY [2] - Trading characteristics indicate a rapid increase in liquidity, with European currencies starting to trend, making it suitable for capturing trend initiation points [2] European Independent Session (18:00-20:00) - Core drivers include the London trading period, significant data from the Eurozone and the UK, and operations by major European institutional funds [3] - Suitable currency pairs are purely European, with main pairs being EUR/USD, GBP/USD, and EUR/GBP, and secondary pairs including USD/CHF [3] - Trading characteristics reveal medium to high liquidity, with clear volatility patterns driven directly by European fundamentals [3] Overlap of European and American Sessions (20:00-24:00) - Core drivers involve global funds entering the market, significant U.S. data releases, and competition between major institutions, marking the peak of global liquidity [4] - Suitable currency pairs include all major currency pairs, with a focus on dollar-based pairs such as EUR/USD, GBP/USD, and USD/JPY [4] - Trading characteristics show the most intense volatility and strongest trends, making it ideal for swing and trend trading [4] American Independent Session (24:00-2:00) - Core drivers consist of the New York closing funds, secondary U.S. data releases, and fluctuations in U.S. Treasury yields [5] - Suitable currency pairs are primarily dollar-based, with main pairs being USD/JPY, AUD/USD, and NZD/USD, and secondary pairs including EUR/USD and GBP/USD [5] - Trading characteristics indicate a gradual decrease in liquidity, with volatility narrowing compared to overlapping periods, focusing on trend continuation or slight pullbacks in dollar-based currencies [5] Summary - The more focused a trading session is on local economies, the more direct the driving factors and purer the volatility for corresponding currency pairs [6] - The overlap between European and American sessions is the only time to trade all categories of currency pairs, making it the best window for trend trading [6] - Non-overlapping single sessions should prioritize trading local currency pairs to avoid trading pairs driven by non-local factors, which can lead to low volatility and false breakouts [6]