The Magpies have won three out of their last four Premier League matches to lift them up into 13th place and six points clear of the drop zone.
But Pardew knows defeat to the Capital One Cup winners at the Liberty Stadium could set them back.
"It's that momentum, it changes the outlook of players as well as staff, directors and supporters," he said.
"All our supporters will be looking closely at this game. It's a key game and we have got to make sure we get something out of it, a positive result."
After being unable to invest in the squad over the summer, Pardew was given the green light to buy new players in January, with Mathieu Debuchy, Mapou Yanga-Mbiwa, Massadio Haidara, Moussa Sissoko and Yoan Gouffran all arriving at the club.
That influx of players has provided a welcome boost, with Pardew's side now looking more like the team of last season that qualified for the Europa League.
"We are much more aggressive in our play. We have tried to be aggressive all year, even with teams that perhaps didn't have the quality to play that way," added Pardew.
"We have always played on the front foot, as Manchester United and Arsenal proved, but ultimately, we didn't have enough to win those two games.
"I always enjoy it, but you don't want to have defeats. I don't like any time when we lose and we have had some tough weeks when I was looking at the squad and knew it wasn't good enough, not strong enough.
"It's difficult to go into games like that, so it's been nice this last few weeks to have a strong squad - strong enough - and not only that, but get results on top of that as well because it doesn't always go hand-in-hand.
"Your squad comes together, but it takes a while for it to click into gear. Fortunately, we almost hit the ground running when the new guys arrived."
Pardew insists he does not regret not being able to add key players to his squad in the summer, a factor which may have seen them prospering in the top half of the table.
"No, I don't really think like that. I don't think there would have been any chance of signing Sissoko, for example, or Mapou in that summer window," he said.
"Debuchy, we know, could have possibly got over the line, but it's difficult to say. At the time, it seemed the right thing."