In currency trading and the Forex market, the pair EUR/ZAR is called exotic. ZAR, as a component of the Rand, has less liquidity than the currencies of developed markets. EUR/ZAR links South Africa’s growing economy with Europe’s more mature economic base. Since each position is valued at approximately $ 0.7 per lot, there are many opportunities for adopting risky and more aggressive investment strategies. This exotic pair is gaining up to 2000-2500 points per day, and professional operators use this opportunity, despite the wide spreads.
For more than twenty years, the pair has shown excellent dynamics, but this does not allow us to predict its dynamics in the medium and short term. The fact is that the EUR/ZAR pair is characterized by low liquidity and a high level of price volatility, extreme harshness, and even chaos.
Analysis of activity during the day shows that it is best to sell and buy a pair from nine in the morning until six in the evening, as this time is wholly connected with the opening of the European session.
According to experts, this exotic pair is recommended for trading, but if you choose it, you should adhere to the following recommendations.
First of all, the EUR/ZAR pair is the most quoted in the European market. This means that the trader can monitor the maximum movement in the market and use more opportunities during the transaction in London.
There are many trading opportunities with this steam. On a busy day, you can see that EUR/ZAR is changing between 16.9000 and 17.0000, and there is a movement of 100 points. Since each item is valued in a small amount, you can aim for a higher target profit with each transaction.
When trading in EUR/ZAR, you need to apply the right risk management strategies. When purchasing with EUR/ZAR, a trader cannot apply the same rules and trading tactics that he uses with EUR/USD. With a pair of Euros against the Rand, you need more flexibility in risk management, mainly because there is little risk associated with any market movement.
This, in turn, allows a more flexible approach to the currency pair. Knowing that margin does not come when the market needs more time to recover from a change in direction, you can use averaging and hedging more flexibly.
The ability to manage risks also creates a restriction of transactions on the currency pair in which the investor is investing. Typically, brokers facilitate risk management. With relatively limited initial capital, a trader has more options when it comes to ordering sizes. For example, you can trade more than ten lots with the right margin and leverage.
News and announcements on South African economies are still essential. They have a significant impact on the movement of the market and the EUR/ZAR pair. Therefore, before the large economic communiqués, one should pay attention to the platform chart.
Sudden changes in the pair's course are not unusual. At the same time, it is not at all difficult to see the model and understand the general direction in which the market is moving. And assuming that most reputable brokers have very reasonable spreads, EUR/ZAR can be considered very promising for trading.
Unique pairs, such as EUR/ZAR, are always interesting for traders, whether he is experienced or new. Regardless of the initial investment objectives of the trader, it can safely be said that the EUR/ZAR trade will be manageable and incredibly profitable.