The Australian economy continues to chug along as the nation added 24,500 jobs in Oct. compared to the 10,000 jobs that were expected to be lost. As a result, the Australian dollar surged to a 15-month high of 0.9368 against the U.S. dollar.

The details of the report tempered the enthusiasm somewhat as the unemployment rate rose to 5.8% from 5.7% (as expected) and data revealed that almost all of the jobs created were part time. Still, the overall picture of Australia remains the healthiest of all major economies.

Technically, the break higher pushed AUD/USD above yesterday’s highs and on pace for a retest of the July 2008 high of 98 cents.

All signs point to a retest of 98 cents

Technically, the AUD/USD chart has been the ‘risk’ leader throughout the recovery. Charts like NZD/USD and EUR/JPY have shown warning signs but the Austrlian dollar continues to make a convincing case for bullishness.

On cautionary signal may have come from the S&P 500 today. After touching a fresh 2009 high, it pulled back below 1100, which is also the 50% retracement from the high. If it can close above 1100 in the coming days, it points to a rise to at least 1227, something that would ensure a re-test of 98 cents in AUD/USD.

For shorter-term traders, expect the bullish enthusiasm from the employment report to solidify a rate hike at the Dec. 2 Reserve Bank of Australia meeting and spark chatter about the possibility of a 50 basis point hike. At the moment, the market is pricing in just an 87% chance of a 25 basis point hike. As that moves toward 100 in the next day or two, it will provide tail winds for the Aussie dollar.