daylight

Software:
Unreal Engine 4.21

UE4‘s Directional Light mimics sun lighting and shadow fairly realistically,
And the Atmospheric Fog visual effect produces a realistic clear sky background that includes the sun’s disk image in the sky.
> The Atmospheric Fog produces a result similar to an implementation of a Preetham physical sky model in common rendering software.

Combined together, these two elements can produce an effective day-light system,
But inorder for this to work the sun’s direction should be controlling the time of day simulated by the Atmospheric Fog.

For the Directional light to control the Atmospheric fog:
In the Directional Light’s details, under light, expend the settings and enable:
Atmosphere / Fog Sun Light

Note:
There is a limitation to this setup’s realism because the sunlight’s color shouldn’t be pure white, but rather yellowish, to orange, depending on the time of day (you can find tables of the sunlight’s color temperature for various time of day on the web)
There is no problem setting the sun’s color, but the problem is that it causes additional coloring of the Atmospheric Fog which isn’t needed since it already is simulating the sky’s color correctly.
The result of this limitation is that we can see a sunset sky with a white sunlight which is wrong.
I didn’t find a workaround for this yet, can’t find a way to set the Atmospheric Fog‘s sun vector without connecting it to a Directional light and can’t find a way to make the Directional Light‘s color not affect the Atmospheric Fog‘s color.

Update:
It seems this limitation can be overcome by disconnecting the Atmospheric Fog from the Directional Light and using the Atmospheric Fog Object’s rotation to control it.

Related:

1. UE4 HDRI Lighting
2. 3ds max & V-Ray to UE4 Datasmith workflow
3. Unreal – Architectural glass material
4. Unreal – Camera animation