The former Neighbours star joined the cast of the soap late last year and viewers will see Ally's first scenes in a fortnight's time.
Hinting at what the future holds for the new arrival, O'Connor told All About Soap: "There's definitely potential for a romantic relationship developing between Ally and someone, but my lips are sealed on who it could be!"
Ally sets up home in Hollyoaks as a new lodger for Rhys Ashworth (Andrew Moss) and Jacqui McQueen (Claire Cooper), but the pair's neighbours Ste Hay (Kieron Richardson) and Amy Barnes (Ashley Slanina-Davies) are particularly intrigued by his presence.
"Both Ste and Amy take an instant fancy to him, but Ally's not really aware of their interest," O'Connor continued. "The whole thing is pretty innocent to start off with, but it quickly gets more complicated when Ste and Amy make it their mission to find out whether Ally is gay or straight.
"There's some mystery surrounding Ally's sexual orientation, but I don't think he realises that Amy and Ste are trying to find out which way he swings. They're both being ultra nice and saying suggestive things to him. I know which team he bats for, but the producers have sworn me to secrecy."
Hollyoaks airs Ally's first episode on Tuesday, January 31 at 6.30pm on Channel 4.
> Neighbours star Dan O'Connor joins Hollyoaks
> Hollyoaks newcomer Ally to spark love war
> Read more Hollyoaks spoilers and news