The Eagles sit fifth on the Premier League table at the turn of the year having picked up 31 points in 19 matches in the second half of 2015.
As Palace prepare for their first outing of 2016, against Chelsea on Sunday, star midfielder Cabaye believes there is plenty of positivity around Selhurst Park as the South Londoners push for a spot in one of Europe's top competitions as well as pursuing a decisive run in the FA Cup.
"This [festive] period is very, very important," he told the club's official website. "The thing is, we have to play with confidence.
"We have a very good team and some fantastic players - the balance of the team is right.
"We have to trust each other to play and to do the right things, then I think we can be the surprise of the season ... except [for] Leicester at the top!
"Hopefully we will stay around the European places, because I think that objective can become a reality.
"We've got the Premier League to focus on and also the FA Cup is a fantastic trophy. It's iconic, it's held in such high esteem."