Pascoe warned they will face a vastly different Reds side this weekend after taking giant strides - despite last weekend's FA Cup defeat at Oldham.
He said: "The lads have gradually been getting used to the style, the philosophy of how to play the way we want.
"They've been getting better and better for a couple of months now.
"It will be tough but the way we played against City at home, when we should have got more out of it than we did, makes us confident.
"Look at that game and how we've performed against the likes of Chelsea, Spurs, United. We have played well, so we're looking forward to this.
"It was the same on Wednesday against Arsenal, when we could have sneaked it at the death."