The cursed island: why america needs greenland

EUR/USD

Key zone: 1.1550 - 1.1650

Buy: 1.1680 (on strong positive fundamentals) ; target 1.1850; StopLoss 1.1620

Sell: 1.1580 (after retesting the 1.1650 level) ; target 1.1400; StopLoss 1.1640

A split within NATO over Greenland would create an existential threat to Europe’s security. Trump is not inclined to discuss a potential EU response, yet confidently declares the need to counter the “Russian threat” to Greenland.

Trump continues to conduct U.S. foreign policy using methods that are familiar to him — mafia-style tactics. On the path to his goal, the current U.S. president recognizes no obstacles, sees no enemies, listens to no allies, and most importantly — doubts neither the legality nor the effectiveness of his actions.

So far, Donnie has not dared to launch a real military operation against another NATO member, as this could lead to the collapse of the alliance, the loss of U.S. bases, air corridors to Europe, access to intelligence, and billions in arms sales. Such ideas are not supported even by Pentagon leadership loyal to Trump.

As a result, familiar economic blackmail is being used.

Trump, who demanded that Denmark grant permission for U.S. control over Greenland, announced on Saturday evening the introduction of a new 10% tariff starting February 1 on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland. From June 1, this “penalty” for supporting the island’s independence will be increased to 25%. Trump promised to cancel these tariffs only after the sale of Greenland.

What can Europe do?

• The EU has suspended ratification of the U.S.–EU agreement and is questioning previously reached arrangements, while the deal between the U.S. and the United Kingdom is under the threat of a complete breakdown in negotiations. This will negatively affect both sides, leading to higher tariffs, reduced trade turnover, and slower economic growth.
• The EU is ready to impose additional tariffs on U.S. goods worth €93 billion in response to Trump’s threats regarding Greenland. On Sunday, EU ambassadors, together with the so-called Anti-Coercion Instrument (ACI), confirmed the possibility of restricting access for American companies to the European market.
• By attempting to occupy new territories, the U.S. is entering into conflict with its largest creditor — Europe. European investors hold U.S. stocks and bonds worth $8 trillion, making a new phase of the trade war extremely risky for the United States.
• A mass sell-off of U.S. assets by Europeans (the “sell America” signal) could seriously affect the dollar, U.S. Treasury yields, and the overall condition of American markets. Investors are already reducing exposure to dollar-denominated assets, fearing a severe удар to the U.S. economy.

European officials hope that their retaliatory measures will increase bipartisan pressure on Trump within the United States and force him to back down.

However, on Sunday U.S. Treasury Secretary Bessent stated that Europe is too weak to ensure Greenland’s security and rejected the EU’s demand to retain control over the strategically important island.

Market reaction remains restrained so far: S&P futures fell by nearly 1%, while EU equity futures declined by slightly more than 1.1%. Gold and silver prices reached new highs, and the dollar weakened against the Swiss franc and the yen, which are still considered reserve assets.

As for the current technical picture of EUR/USD, buyers now need to focus on breaking and holding the 1.1650 level. Only this would allow a move toward testing 1.1675. From there, a climb toward 1.1700 is possible, but achieving this without support from major players will be difficult.

So we act wisely and avoid unnecessary risks.

Profits to y’all!