The EUR/USD is the most known trading pair and mostly it has the best spread which is a very important thing when deciding which trading pair to trade.

During the day there are times when the pair is not good for trading because volatility is very low and it is hard to make some pips. If you make some pips during smaller volatility that should cover spread costs.

A trader should not plan to trade the whole day, but to wait for the best volatility and volume in the market so trading signals with defined targets can be executed very quickly.

What Impacts EUR/USD Volatility

EUR/USD trading pair volatility is affected by the trading session and news that have a high impact on the currencies.

The EUR/USD pip range depends on the trading session which defines which part of the world is active in the Forex market.

There are four trading sessions:

1. Sydney trading session
2. Tokyo trading session
3. London trading session
4. New York trading session

All four trading sessions have different trading volatility because the different amount of traders are active at the time.

Most active traders will be when Europe and U.S. traders are active and that is when London and New York trading session is active.

When two trading sessions overlap we will have the most active market and then the volatility will be the highest.

News Impact

The news that have an impact on the EUR/USD volatility are the news about currency rates and economic events that have an influence on the overall GDP of European Union countries or U.S.

Here is a list of events that causes volatility:

• political events like Brexit, Switzerland moving away from euro peg
• economical growth shown through GDP and interest rates
• monetary policy driven by central banks, ECB and FED

Daily EUR/USD Pip Range

When we take a look into trading session distribution(GMT+1) we can see how the volatility changes as time pass during the day.

If we start from the left, which represents the Asian session, Sydney and Tokyo, we can see that the volatility is pretty low and moves around 10 pips.

Only when Sydney and Tokyo session overlaps we see small increase by few pips because more traders are active at the same time.

Even though EUR/USD is well-known currency pair it is not traded so much during the Asian session. The reason behind smaller volatility is that Asian traders prefer to trade Asian currencies, like AUD/USD or AUD/JPY.

In the middle of the day when London trading session starts, EUR/USD volatility increases and we have higher volatility which is double than Asian session. Pip range reaches 20 pips on average which gives more opportunity to trade.

When New York trading session starts we have an increase in volatility because two major trading sessions overlap and high amount of traders are active.

The Best Time to Trade EUR/USD Trading Pair

If we make a conclusion from the information above we can say that the best time to day trade EUR/USD is when we have the highest volatility.

When there is high volatility and volume, the spread on the currency pair is the lowest so trader can take more advantage during that time.

Highest volatility is present when we have overlap between two major trading sessions on the Forex market. That is when we have London and New York trading session active.

If we want to have the best volatility we should target 14:00 - 17:00 o'clock London time because that is the time when most traders are active.

It is also the time when news are, mostly, released in New York which has a very high impact on the EUR/USD trading pair.

If we count all the above said it is smart not to trade during the whole day because less volatility and wider spread can lower the possibility of profitable trade.

There is a difference between days in a week when it is the best time to trade EUR/USD trading pair because volatility is different on Monday, Tuesday and on any other day in a week.

To find out more which day in a week is the best and which day has the highest pip range you can read more on EUR/USD trading pair pip range analysis.