The Americans have won the women's soccer tournament in southern Portugal six times in the past eight years. In last year's final, they defeated the Danes 2-1.
This year, the Olympic champions again face the top European nations in the invitational competition.
Along with the United States and Denmark in Group B are four-time champion Norway and Iceland. Group A includes two-time world champion Germany, two-time Algarve Cup champion China, Sweden and Finland.
The winners of each group will meet in the final March 11.
The tournament also includes a Group C, but Portugal, Poland, Wales and Austria are not competing for the title.
The Algarve Cup provides the U.S. team with its first games and is the only major tournament the Americans are scheduled to play in this year.
"It's not a World Cup year or an Olympic year, so we can try different things and one thing we want to do is to get numbers around the ball carrier," United States coach Pia Sundhage said. "We have some technical players here at the Algarve Cup and I think we will spend time attacking and focusing on getting players in front of and behind the opponents' back line."
The U.S. squad features 13 players from the team that beat Brazil for the Olympic title in Beijing, but is missing two veterans.
Top scorer Abby Wambach is not yet fit as she nears the end of her comeback from a broken leg, and playmaker Kristine Lilly, who helped lead the U.S. team to two World Cup wins and two Olympic gold medals from 1991-2004, is training with the Boston Breakers.
"We have some young players and they can get some experience like we've all gotten on this team," United States midfielder Carli Lloyd said.
Wambach's absence will shift the scoring responsibility to forwards Natasha Kai (15 goals in 2008), Amy Rodriguez and Megan Rapinoe.
Kendall Fletcher, who has never played an international match for the United States, is among the defenders available. Also looking for experience in Portugal are midfielders Tina DiMartino and Angie Woznuk.
Midfielder Shannon Boxx returns to the tournament where she was twice named MVP, in 2004 and 2006.
The European teams are preparing for this year's European championship. The American players have been training for the inaugural season of the Women's Professional Soccer league, which starts at the end of the month.
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