Today's events are likely to determine the near?term fate of financial?market volatility. On Wednesday, Mr. Trump will be the central figure at the World Economic Forum, and attendees will watch the development of the president's public confrontation with a growing number of Greenland allies, as well as talk of a revival of the "sell America" trade.

The question arises whether European countries that hold trillions of dollars of US bonds and equities will decide to use those assets as a weapon and divest after Mr. Trump threatened to impose additional tariffs on countries that oppose his Greenland plans. Yesterday, one Danish pension fund decided to sell all its US Treasuries, a serious precedent and a challenge to the notion of Treasuries as a risk?free asset.

Investor sentiment is at a boil. Uncertainty around trade wars and geopolitical tensions is driving a search for safer assets. Gold and the currencies of developed economies are in higher demand. How long that trend endures will depend on politicians' ability to find compromises and de?escalate the conflict.

Decisions made in Davos today will determine whether volatility keeps rising or whether signs of a recovery emerge. Close monitoring of events and careful data analysis remain key tools for successful investing in a period of uncertainty.

Scott Bessent, Treasury secretary and a member of the US advance team, already at the Swiss ski resort, said yesterday he did not expect strong resistance from European leaders and urged them to accept the move, as necessary. He dismissed suggestions that Europe would retaliate by selling Treasuries as a "false claim." He also urged calm, saying the situation had only unfolded over 48 hours and he was confident leaders would avoid escalation and resolve the matter.

Recall that European countries own nearly 40% of US Treasuries. In practical terms, no single European country can sever ties with the United States either on security or economic grounds. The informal threshold seems to be that a real sale of Treasuries would require nothing less than a US invasion of Danish Arctic territory, a NATO member.

For now, the euro is a clear beneficiary in the currency market, and the US dollar continues to lose ground.

A technical outlook for EUR/USD suggests that buyers should consider reclaiming 1.1745. Only that will allow a test of 1.1765. From there, a move to 1.1785 is possible, although advancing beyond that without support from major players would be difficult. The extended target is the high at 1.1810. In the event of a decline, meaningful buying interest is likely only around 1.1714. If no buyers appear there, it would be prudent to wait for a new low at 1.1690 or to open long positions from 1.1660.

As for GBP/USD, buyers of the pound sterling need to capture the nearest resistance at 1.3460. Only that will allow them to target 1.3490, above which a breakout would be challenging. The extended target is the area around 1.3520. If the pair falls, bears will try to seize control at 1.3425. If they succeed, a break of that range would deal a serious blow to bullish positions and could push GBP/USD down to 1.3400 with scope to extend to 1.3380.