Yesterday's dovish BOC statement send USD/CAD back above the 1.2600 figure — a move that no doubt pleased the Canadian monetary officials who want to see the value of the currency remain relatively low. But the rally could be short-lived if the data continues to surprise to the upside.

Tommorrow the market will get a look at CPI and Retail Sales Reports and although both datasets are projected to be a bit lower than the month prior and upwards surprise could send USD/CAD back to a retest of the 1.2500 level. Despite Governor Poloz's caution, the central bank has not ruled out the prospect of another rate hike in May, and some analysts continue to believe that the BOC will act.

Furthermore, with oil prices within a dollar of the key $70/bbl mark, the Canadian economy could absorb a rate hike with relative ease so the loonie could still have some juice left in the trade if the data provides the catalyst.