Best currency pairs to trade at night

One of the advantages of foreign exchange (forex) trading is that, unlike equity markets, it’s open 24 hours a day, five days a week. At any time of day or night, at least one of the three major currency markets – Asia, North America and Europe – is open for trading.

The markets that are open overnight will depend on where you are located. However, as a significant portion of currency trading occurs on the North American and European markets, night trading usually refers to activity on the Asian markets.

So, how does overnight forex trading work, and how can you choose the best currency pairs to trade at night?

What are forex night trading hours?

Forex markets are open from 10pm (UK time) on Sunday until 10pm on Friday (GMT in winter, BST in summer). In the UK, overnight trading is considered the period on Asian markets between the close of the US session at 5pm EST and the reopening of European markets at 8am CET the following day.

Asian currency traders sometimes refer to themselves as night traders if they trade during the day in their home country, as this period is globally known as the after-hours or night session.

The best time to trade currencies is typically when the market is most active and liquidity is higher. When more than one of the major markets is open, and there is overlap in trading activity, currency values tend to fluctuate more – creating more pronounced market movements.

The overlap between the Sydney and Tokyo sessions offers a two-hour window of increased price activity. The one-hour overlap between the Tokyo and London sessions can also bring some movement, although there’s usually less time for significant volatility to build.

What are the most common currency pairs to trade at night?

As forex can be traded around the clock, the best currency pairs to trade at night will depend on your individual risk tolerance and trading strategy. Overnight forex trading can support both long-term positions and short-term strategies such as scalping.

Asian currency pairs

For those looking for more volatility, Asian and Oceanian cross rates that don’t include the USD – such as AUD/NZD, AUD/JPY, or NZD/JPY – may offer more movement during the UK night session. These pairs tend to react to economic data and developments from Asia and Oceania.

Both the Australian dollar (AUD) and New Zealand dollar (NZD) are commodity-linked currencies, as their economies depend heavily on commodity exports. Because commodities are priced in US dollars, the dollar often shows an inverse relationship with these currencies.

Due to their strong trade connections with China, both Australia and New Zealand are influenced by Chinese economic performance. The AUD/NZD pair is therefore affected by Chinese growth data as well as domestic indicators from both countries. When trading AUD/NZD, it’s important to keep an eye on global commodity prices, macroeconomic data, and regional geopolitical developments.

The AUD/JPY pair can also see higher volatility overnight. While the AUD is linked to China’s economy, the Japanese yen is influenced by global sentiment and often seen as a safe-haven asset. Historically, low Japanese interest rates encouraged the 'carry trade' – borrowing in yen and investing elsewhere for higher yields – though this has shifted in recent years as global interest rates have become more variable.

Smaller margin requirement

Another feature of night trading is that some currency pairs may require a smaller margin than those active during the European and North American sessions. For instance, NZD/JPY may require a smaller margin than a pair such as GBP/USD.

Less volatility

Major currency pairs such as EUR/USD and EUR/GBP can be less volatile overnight, which may appeal to those who prefer calmer market conditions. However, reduced liquidity can widen spreads, meaning costs may be slightly higher per trade.

Strategies that seek to capture small price changes – such as scalping or automated trading programmes – can perform well during these quieter periods, as there’s less competition and fewer missed opportunities.

Other strategies

Traders using longer-term approaches may find night trading useful for early entries before key economic announcements. For example, if a major US release is due the next day, a trader might position early during the Asian session in anticipation of possible reactions.

Overnight trading can also allow traders to benefit from retracements after large daytime moves. For instance, if EUR/USD ends the US session near a resistance level, it might pull back slightly during Asian hours. However, traders should always carry out their own research to confirm such signals.

Past performance is not a reliable indicator of future results.

Final thoughts

Check the latest market updates, fundamental and technical analysis, and independent commentary before making any trading decision. Remember, past performance is not a reliable indicator of future results, and you should never trade with money you can’t afford to lose.

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