Boss Alan Pardew has so far guided Newcastle to sixth in the Premier League, four points above Liverpool and a further 10 points ahead of Sunday’s opponents.
Taylor has been a key performer for his side this season, often filling in at left-back or midfield and chipping in with some key goals and, with just 12 games remaining, the 27-year-old is now dreaming of Europe.
"If we can beat them, then we open that gap up between us and the teams below a little bit more," Taylor told the club's official website.
"We are a few points ahead of Liverpool and it's looking okay at the minute, but if we can beat Sunderland then who knows?
"We can go on to bigger and better things. Europe is in our sights now."
Newcastle suffered a minor blip in their last fixture, dropping a two-goal lead at home against relegation-threatened Wolves, though the right-back believes avoiding defeat shows how far they have come.
"It was disappointing to lose a two-goal lead against Wolves, but at the end of the day, we didn't lose a football match and there were positives to take out of it into Sunderland," he continued.
"It's always tough to put together any sort of unbeaten run in the Premier League, but we have got a good one at home and we take it into the biggest game of the season for us so far.
"We want to keep that run going, keep our stadium a tough place to come, and that will be no different on Sunday."