Technical Analysis: Week 2, 2026
(Bitcoin | Ethereum | D40/EUR)
Welcome to your weekly edge in the markets with clear, actionable insights.
It’s split into two parts:
- Week Ahead – An overview of current market conditions, previewing the week ahead.
- Technical Analysis – our top 3 trade ideas for the week, complete with charts and key levels to watch.
Week Ahead
Week of January 12, 2026
Markets begin the second full week of 2026 near record highs, with US equities extending their early-year rally despite an increasingly noisy geopolitical backdrop. The S&P 500 and Dow Jones pushed to fresh all-time highs last week, supported by easing inflation expectations, optimism around Fed policy, and growing confidence that the Q4 earnings season will deliver solid profit growth.
While headlines from Venezuela, Iran, and Greenland injected caution into positioning, risk appetite has so far proven resilient. Attention now turns to US bank earnings and the official start of earnings season, alongside key inflation data that could shape the next leg in markets.
News
Geopolitics dominate early-year trading
The week was shaped by geopolitical developments as the US moved to capture Nicolás Maduro, the unrecognised President of Venezuela, on drug-related charges. The action pressured crude prices and encouraged a more cautious market tone.
US President Donald Trump also reignited transatlantic tensions by reiterating interest in annexing Greenland.
Later in the week, attention shifted to Iran, where mass protests erupted after Trump publicly backed demonstrators. Authorities restricted internet access, raising concerns about stability in a key oil-producing region.
Equities grind higher
Despite the geopolitical noise, US equities advanced. The Dow Jones Industrial Average and S&P 500 climbed to fresh record highs, while the Nasdaq Composite underperformed.
Sentiment in tech improved late in the week following strong earnings from TSMC and reports that China approved commercial purchases of NVIDIA’s H200 chips.
US data mixed, policy headlines active
ADP employment missed expectations, though wages continued to rise. JOLTS job openings fell to their lowest level since 2021, while the US trade deficit narrowed to its smallest level since 2009 — a positive signal for Q4 GDP.
Trump added volatility with several policy announcements, including criticism of defence contractors’ capital returns. Raytheon briefly slid 6% after being singled out on social media before rebounding. Trump also moved to restrict institutional housing investment and directed Fannie Mae and Freddie Mac to purchase up to $200bn in MBS.
Europe: inflation cools
Eurozone inflation returned to the European Central Bank’s 2% target, lowering expectations for near-term rate changes. The euro weakened further as investors favoured the dollar amid ongoing risk uncertainty.
Biggest Market Movers
- FTSE 100 touched a record high on Tuesday, led by healthcare, before easing back later in the week.
- The US dollar trended higher as investors favoured defensive positioning ahead of key risk events.
- The Canadian dollar underperformed, pressured by crude volatility and caution ahead of US jobs data.
- WTI crude whipsawed — falling early on expectations of higher Venezuelan supply, then rebounding on fears of disruption in the Strait of Hormuz linked to unrest in Iran.
Week Ahead
Earnings Season Takes Centre Stage
The focus now shifts decisively to the start of Q4 earnings season, with US banks leading the way. After equities opened 2026 strongly, results and forward guidance from the financial sector will be critical in determining whether the rally can extend.
- JPMorgan Chase reports Tuesday, setting the tone for earnings season.
- Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley follow later in the week.
Markets will be watching closely for commentary on consumer credit, loan demand, trading activity, and capital markets momentum.
Key Macro Events
- US CPI (Tuesday): Headline inflation is expected to ease to 2.6%, potentially reinforcing expectations for further Federal Reserve easing.
- China trade balance (Wednesday): A test of export strength and global demand.
- UK monthly GDP (Thursday): Likely to confirm continued economic softness and keep pressure on sterling.
Technical Analysis
We look at hundreds of charts each week and present you with three of our favourite setups and strategies.
Bitcoin
Setup
Neutral - Long term uptrend / Daily downtrend
- Ascending triangle pattern
- Broken downtrend line
- Above 20/50 day SMAs
- Below 200 day SMA
- RSI bullish not overbought
Commentary
Bitcoin has formed a triangle at a monthly demand zone. After a steep correction from the highs in November, price could either continue into a new long term downtrend or retrace back towards the 200 DMA.
Strategy
- Buy triangle pattern breakout higher
- Sell triangle pattern breakdown lower
Ethereum
Setup
Bearish - potential bullish reversal
- Inverse H&S bottom pattern
- Rebounded off 50% retracement of 2025 rally
- Above 20/50 SMA
- Below 200 SMA
- RSI moved into bullish range
Commentary
NOTE: The setup is similar to Bitcoin and both will likely move in the same direction so be careful not to double up on a correlated trade.
The Bullish case for Ethereum is a bit more convincing with an inverse H&S pattern - but it could also turn into a triangle pattern breakdown.
Strategy
- Buy touch of broken neckline
- Wait and buy on break above last peak at 3,300.
D40/EUR
Setup
Bullish - record high / range breakout
- Strong breakout from 8-month trading range
- RSI in bullish overbought territory
- Above 20/50/200 SMAs
Commentary
The former range resistance at 24500/600 is now support if the breakout is to hold. After 5 green days above the breakout level - it looks confirmed. Can now wait for a dip from overbought territory to join the new uptrend.
Strategy
- Buy 24900-25k
- Buy 24500/600
But - as always - that’s just how the team and I are seeing things, what do you think?
Share your ideas OR send us a request!
Cheers,
Jasper
Disclaimer:
The communication does not constitute investment or trading advice, nor does it include any recommendations. Additionally, it does not serve as an offer or solicitation to engage in transactions involving financial instruments. WeTrade does not take responsibility for any actions taken based on the information provided, nor for any outcomes that may occur as a result of the actions taken.
