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.
"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.
