How to Trade EUR/USD During the London Session

(Without Staying Up Late)

For Australian forex traders, the London trading session (4:00 PM to 12:00 AM AEST) is prime for profiting from EUR/USD.

This pair is the world’s most traded, and London’s open brings explosive volatility and strong trends. You don’t need to stay up all night to trade it.

This guide will explain why EUR/USD moves sharply in London, which economic reports are key, and how to trade it using a simple swing strategy. We’ll also cover avoiding false breakouts and adapting to market changes in 2025 and beyond.

Why EUR/USD Is Most Volatile During the London Session

EUR/USD is most volatile in London for three main reasons.

First, London is Europe’s financial hub, where major banks and hedge funds execute large orders. When they enter the market, liquidity surges, and price movements become decisive.

Second, the London session overlaps with the Asian session’s end and the US session’s start. Between 4:00 PM and 7:00 PM AEST, traders see a mix of European and early American participation.

This creates the most reliable trends of the day, often leading to EUR/USD’s biggest moves.

Third, economic data from the Eurozone and the US is released during this time. Reports like German GDP, Eurozone inflation, and US jobless claims trigger sharp price swings.

For Australian traders, the first few hours after work (4:00 PM–7:00 PM AEST) are the best for catching high-probability setups.

Key Economic Reports That Move EUR/USD

To trade EUR/USD successfully, knowing which economic events drive the pair is essential. The euro and US dollar are influenced by different economies. Traders must monitor both Eurozone and US data.

Eurozone Reports That Matter Most

1. European Central Bank (ECB) Interest Rate Decisions – The ECB’s policy changes directly impact the euro. Hawkish signals (hinting at rate hikes) typically boost EUR/USD, while dovish tones weaken it.
2. German and Eurozone Inflation (CPI) – Rising inflation in Europe increases pressure on the ECB to raise rates, often strengthening the euro.
3. Eurozone GDP Growth – Strong economic growth supports the euro, while weak data can trigger sell-offs.

US Reports That Shake EUR/USD

1. Federal Reserve Rate Decisions – The Fed’s stance on interest rates is the biggest driver of USD strength or weakness.
2. US Non-Farm Payrolls (NFP) – Released monthly, this jobs report can cause massive EUR/USD volatility.
3. US Inflation (CPI & PCE) – Higher US inflation usually strengthens the dollar as traders bet on Fed rate hikes.

How to Trade Around News Events

The safest approach is to avoid trading 15 minutes before and after major news releases. Instead, wait for the initial spike to settle, then look for continuation or reversal patterns.

For example, if EUR/USD spikes up after strong Eurozone data but then fails to hold higher, it could signal a false breakout and a short opportunity.

A Simple Swing Trading Strategy for EUR/USD

For Australian traders who can’t sit at the screen all night, a swing trading strategy works best. This approach focuses on capturing multi-day moves.

Here’s how to trade EUR/USD during the London session:

Step 1: Identify the Trend

Before entering any trade, check the daily and 4-hour charts to see if EUR/USD is in an uptrend, downtrend, or range. If the price is making higher swing highs and higher swing lows, look for buy setups.

If it’s making lower swing highs and lower swing lows, focus on shorts.

Step 2: Wait for a Pullback to Key Support/Resistance

EUR/USD often retraces before continuing its trend. Look for pullbacks to:

• Moving Averages (50 or 200-period on the 4-hour chart)
• Previous swing highs/lows
• Fibonacci retracement levels (38.2%, 50%, 61.8%)

Step 3: Enter on a Confirmed Reversal Signal

Once price pulls back to a key level, wait for confirmation that the trend is resuming. This could be:

• A bullish engulfing candle (for buys)
• A bearish pin bar (for shorts)
• A break of a minor trendline

Step 4: Set Stop-Loss and Take-Profit Rules

• Stop-Loss: Place below the recent swing low (for buys) or above the swing high (for shorts).
• Take-Profit: Aim for at least a 1:2 or 1:3 risk-reward ratio. Or, trail your stop as the trade moves in your favor.

Example Trade Setup

• EUR/USD is in an uptrend on the daily chart.
• On the 4-hour chart, price pulls back to the 50% Fibonacci retracement level.
• A bullish engulfing candle forms, confirming the uptrend is resuming.
• You enter long, place a stop below the recent swing low, and target the previous high.

How to Avoid False Breakouts During Low-Liquidity Periods

False breakouts are a common trap for EUR/USD traders, specially during low-liquidity periods like the Asian session or late New York hours. Here’s how to avoid them:

1. Trade Only During High-Liquidity Hours

The best times to trade EUR/USD are:

• London Open (4:00 PM–7:00 PM AEST) – High volume, strong trends.
• London-New York Overlap (9:00 PM–12:00 AM AEST) – Good for continuation moves.

Avoid trading during Asian session (12:00 PM–4:00 PM AEST) unless you’re scalping small ranges.

2. Confirm Breakouts with Volume

If EUR/USD breaks a key level but volume is low, it’s likely a fakeout. Many trading platforms (like TradingView) show volume indicators—use them to confirm real breakouts.

3. Wait for a Retest Before Entering

Instead of jumping into a breakout immediately, wait for price to retest the broken level. If it holds as support/resistance, the breakout is more likely valid.

4. Watch for News Gaps

Sudden news (like unexpected ECB statements) can cause gaps that trap traders. Always check the economic calendar before holding overnight positions.

How This Strategy Affects Traders of Major Currency Pairs

EUR/USD isn’t the only pair that moves during the London session—GBP/USD, USD/JPY, and AUD/USD also see increased volatility. Here’s how this strategy applies to other majors:

• GBP/USD – Even more volatile than EUR/USD, making it great for aggressive traders.
• USD/JPY – Tends to trend smoothly during London hours, specially when US bond yields move.
• AUD/USD – Less active in London but can be traded if Australian data is in play.

The same swing trading rules (trend identification, pullback entries, proper risk management) work across all these pairs.

Final Tips for Trading EUR/USD from Australia

1. Focus on the First 3 Hours of London – The best trends start early.
2. Use Alerts for Key Levels – If you can’t watch the charts, set price alerts on your phone.
3. Avoid Overtrading – One good setup per day is enough.
4. Stay Updated on ECB & Fed Policy – Central bank decisions drive long-term trends.

By mastering EUR/USD during the London session, Australian traders can profit from the world’s most liquid forex pair—without sacrificing sleep.

Want More Trading Strategies Tailored for Aussie Traders?
At The Trading Coach, we help Australian traders develop winning strategies that fit their schedules. Whether you’re looking to trade forex part-time or refine your swing trading, our coaching programs are designed for real-world success.

Disclaimer

The information, strategies, techniques and approaches discussed in this article are for general information purposes only.  The Trading Coach International does not necessarily use, promote nor recommend any strategies discussed in this article.  The information in this article may not be suitable for your personal financial circumstances and you should seek independent qualified financial advice before implementing any financial strategy. The Trading Coach International is not a financial advisor and does not have AFS registration.