The Championship side are in the relegation zone after a run of three straight losses but are eyeing a sixth round spot to boost morale and turn their fortunes around.
They beat Oxford United and Huddersfield Town in January to set up their meeting with Wednesday and in avoiding a Premier League side, they have a real chance of reaching the last eight.
Charlton have not won a league fixture in 2014 but Powell believes victory over Wednesday could help them in their survival fight.
"We're under no illusions that our season is about retaining our Championship status," Powell said on Thursday.
"But it's (the FA Cup) a welcome distraction.
"It's the longest run we've had for a while, I know it's only the last 16 but it's progress.
"I've always enjoyed going to Sheffield Wednesday, it's a place I've won at as a player and a manager."
Powell's side have faced Wednesday once already this season, in December, with the Yorkshire side coming from behind to claim a 1-1 draw at The Valley.
