forex-scalping.com

When the week or the day restarts, the first meaningful liquidity in AUD and NZD pairs often appears at the Sydney and Wellington opens. These currencies are the earliest to see real flow, but the volumes are small compared with Tokyo or London.

The consequence is that AUDUSD, NZDUSD and AUDNZD can have wide spreads and erratic jumps for the first hour after the open. Small orders move price, and fast reversals are common.

One interesting angle is AUDNZD. It trades in a narrow range most of the time, and at the Sydney open it can spike based on a single regional headline, for example from an Australian data release at 23:30 GMT. The spread on that pair is already wide, so the cost of trying to catch those spikes is high.

Data releases from Australia and New Zealand come out in what's late evening for Europe and the US. Scalpers in those time zones can easily miss them or forget the schedule, and then find a sharp move on the chart without knowing why.

A useful cross-check is the Australian dollar's response to the same news on the Aussie crosses. If AUDUSD jumps and AUDNZD does not, the move was about the dollar, not Australia. That distinction changes whether the move is likely to persist into the London session.

Anyone trading the Sydney open: is it worth it after costs, or is the spread too big?

I traded the Sydney open on AUDUSD for a few months because it fell at a convenient time for me, and my honest conclusion is that it only works if you're patient. In the first twenty or thirty minutes the spread on my account often sat at two or three times its daytime level, and the jumps were mostly people repositioning after the weekend or the close rather than anything I could read.

What did work reasonably well was waiting for the Australian data itself. On the mornings with a release at 00:30 GMT, the move after the number tended to be cleaner than the open, and the spread had usually settled by then.

Your cross check against AUDNZD is something I use as well. When AUDUSD moves and AUDNZD stays put, I treat it as a dollar move and expect it to get revisited once London arrives. When both move together, I'm more willing to hold. AUDNZD itself I gave up on at that hour, because the cost per trade was simply too high for my targets.