The last two hours of New York on EURUSD

[Fairman]

The last two hours of New York on EURUSD

After London closes, EURUSD changes character. Roughly from 16:00 London time through to the New York close, volume drops off, and the pair tends to drift.

Some people love this window. It's calm, there's less noise from news, and if you like slow mean reversion it can suit you. Others, me included most days, find it hard to trade well. The moves are small compared with the spread on a lot of accounts, especially closer to the 17:00 New York rollover when spreads start widening.

Things I've noticed. The London close itself can produce a last push, sometimes a move toward the day's high or low, then a fade. After that, levels from the day act more like soft magnets than hard walls. Breakouts in this window rarely get much follow through unless there's US news or a Fed headline.

So if I trade it at all, it's fades back toward the day's midpoint or VWAP style area, with small targets and a hard cutoff well before rollover. And I'm fine going flat instead. Late session trades are where I've noticed I get lazy with rules, because it feels low stakes.

If your best hours are London, this is a reasonable time to just stop.

[Fairman]

Fridays are different here. The last couple of hours on a Friday can have position squaring into the weekend, and if there's been a big move during the week, you sometimes get a sharp partial retrace late in the day. It isn't predictable enough to trade on its own, in my view, but it's a reason not to assume the late session will be quiet just because it usually is. Month end Fridays can be even livelier with rebalancing flows. So on a Friday I'm more likely to just be flat by the London close and not bother with the last stretch.

[Fairman]

For anyone who trades this window from Asia or Australia, it overlaps with your early morning, which might be the only time you can trade. That's a fair reason to use it. In that case I'd look at USDJPY or AUDUSD rather than EURUSD, since they pick up a bit as Asia comes online. EURUSD has the least going for it then. Either way I'd keep an eye on the spread right through until Tokyo is properly open. Late NY spread on EURUSD can widen a lot near 17:00 New York, and that's exactly when Asia traders are starting their morning.