The Sydney forex session is the part of the 24-hour currency market when trading activity is centered on Australia and New Zealand. It is the first major session to open each weekday and often sets the early tone for the Asia–Pacific trading day. For traders who follow AUD and NZD pairs, or who like to trade with calmer market conditions, the Sydney session is a useful window to understand and, when appropriate, trade.
When the Sydney session runs and why times shift
In terms of global clock time, the Sydney session commonly runs overnight for traders in Europe and the Americas. A convenient rough reference is that it typically covers the late evening to early morning hours in UTC (for many periods it’s approximately 22:00–07:00 UTC), though exact start and end times move with daylight‑saving changes in the northern and southern hemispheres. That means a New York trader will usually see the Sydney session beginning in the late afternoon or early evening local time on the previous calendar day.
Because Australia and New Zealand switch their clocks on a different schedule to Europe and North America, overlaps between sessions shift twice a year. Those shifts change which markets are open together and can temporarily increase or decrease the usual liquidity seen at certain hours. For that reason it’s helpful to check a reliable market‑hours tool or your broker’s session calendar when planning trades.
What makes the Sydney session different
The Sydney session is quieter than the London or New York sessions. On a typical day there are fewer institutional order flows sitting in the market and narrower ranges in many major pairs. That calmer profile comes with three practical effects: spreads may be wider, sudden moves are less frequent (except around scheduled economic releases), and patterns such as ranges or slow trends can persist for longer periods.
Another hallmark is regional focus. Australian and New Zealand economic data, Reserve Bank communications, and commodity price moves—especially iron ore, coal and gold—tend to have an outsized influence on AUD and NZD crosses during this session. News from China also matters because China is a key trading partner for Australia; Chinese data releases often push commodity prices, which feed into AUD sentiment.
Currency pairs to watch during Sydney hours
Pairs featuring the Australian and New Zealand dollars are the most active and responsive to regional news during the Sydney session. In practice this means AUD/USD and NZD/USD typically show the clearest moves, followed by crosses such as AUD/JPY, AUD/NZD and AUD/JPY. USD/JPY can also pick up activity when Tokyo overlaps with Sydney, and that overlap is where Asian liquidity starts to build.
A concrete example: if Australian employment or inflation data is released while the session is open, AUD/USD may gap or move sharply. Traders tracking AUD/JPY will often see amplified reactions when Tokyo participants join the market, because the yen crosses are widely traded in Asia.
Typical trading behaviours and opportunities
Because the session is relatively calm, some strategies tend to work better here than in higher‑volatility sessions. Range trading is one such approach: when price shows a clear short‑term support and resistance band, traders may look to buy near support and sell near resistance with modest targets and tight risk controls. Another common opportunity is trading reactions to gaps that form at the Monday open. Weekend news can leave a pair opening above or below Friday’s close; some traders attempt to fade such gaps after a confirmation signal, while others prefer waiting for a retracement before joining a trend.
When the Sydney and Tokyo sessions overlap, liquidity increases and breakouts can become tradable. For example, a currency pair stuck in a narrow range during the early Sydney hours may break out as Tokyo volumes rise; a trader who waits for a breakout candle and confirms with volume or a momentum indicator can capture the early move.
How economic and fundamental drivers matter
The Reserve Bank of Australia (RBA) and New Zealand’s central bank exert the most direct fundamental influence during this window. RBA announcements, governor speeches and domestic data releases such as employment, retail sales and CPI can produce sharp intraday moves. Commodity price shifts are also important: a surprise rally in iron ore or gold can lift AUD across many crosses, while a slowdown in Chinese manufacturing or trade can weaken it.
To give a practical scenario: imagine a stronger‑than‑expected Australian wage report comes out at 00:30 UTC. Market participants may quickly reprice rate expectations for the RBA, causing the AUD to spike. A trader monitoring AUD/USD could see a one‑hour range expand from a few pips to several dozen pips; managing position size and placing a stop that accounts for the wider random noise is essential in that situation.
Practical tips for trading the Sydney session
Trade size and spread awareness are especially important during Sydney hours because lower liquidity can widen spreads and increase slippage. Use smaller position sizes than you might during the London–New York overlap, or widen your stops to reflect the session’s typical volatility measured by tools such as Average True Range (ATR). Avoid placing market orders into a thin market—limit or stop‑limit orders give you more control over execution price.
Keep an eye on the economic calendar for Australian and New Zealand announcements and on commodity moves that are related to AUD and NZD. When a major release is scheduled, it’s usually safer to wait for the initial volatility to subside before entering a trade, unless you trade news intentionally and are prepared for wider spreads and rapid price movement. Also, be mindful of Monday openings and Friday closings: the market can gap at the start of the week and liquidity often thins toward Friday’s close.
Risks and caveats
Trading during the Sydney session brings specific risks. Lower liquidity can lead to wider spreads, slippage and sometimes erratic price spikes, particularly around unexpected news or thin holiday hours. Overnight holds can expose you to weekend gap risk: if you leave positions open from Friday into the weekend, major geopolitical news over the break can open the market at very different prices on Monday. Daylight‑saving time changes introduce another operational risk—if you don’t adjust your trading hours, you may enter positions at times you did not intend. Always use clear risk management rules, set appropriate stop losses, and size positions so that a single adverse move does not threaten your account.
Remember that trading involves risk and this article is educational, not financial advice. I am not offering personalised recommendations—your circumstances and risk tolerance are unique, so consider those when choosing how and when to trade.
Key takeaways
- The Sydney session opens the trading week and tends to be quieter, with a regional focus on AUD and NZD pairs.
- Watch for Australian and New Zealand data, RBA communications and commodity moves—these drive most of the session’s volatility.
- Common tactics include range trading and waiting for Tokyo overlap to trade breakouts; adjust position size and stops for lower liquidity.
- Trading carries risk: expect wider spreads, possible slippage, and DST/holiday effects; use disciplined risk management.
References
- https://itbfx.com/forex/sydney-forex-trading/
- https://www.avatrade.com/education/trading-for-beginners/forex-trading-sessions
- https://www.forex.com/en-sg/forex-trading/forex-market-hours/
- https://www.oanda.com/us-en/trade-tap-blog/trading-knowledge/when-is-the-best-time-for-forex-trading/
- https://traders-academy.deriv.com/trading-guides/forex-market-hours-best-time-to-trade
- https://www.axiory.com/en/trading-resources/basics/forex-market-trading-sessions
- https://forextraders.com/forex-education/forex-strategy/the-best-and-worst-times-to-trade-forex/