Sousa's side look certain to be in the play-offs now after they picked up a 20th clean sheet of a remarkable season and he admitted that he was pleased with their response.
He said: "Mentally it was very difficult for us after the Forest defeat but we picked ourselves up and it is a good result.
"We need to keep it up for the rest of the season now.
"We defend as a team and our organisation and positioning is excellent.
"We make the right decisions and are focused and we are difficult to beat."
Sousa has seen his side concede just 23 goals in the league all season but he refused to accept that a place in the play-offs was secure.
He said: "Week after week my focus is to help the players to improve every day.
"They are becoming better players every day and we are looking to win each game and we will see where we end up.
"Everyone believes we can go up because we keep picking up results and winning and the players believe.
"But in football many things can happen. We can still improve and we have no time to look at the table."
Watford boss Malky Mackay saw his side slip to just two points above the relegation zone after the defeat but was satisfied with his side's display.
Swans skipper Alan Tate hacked two efforts off the line in a competitive first half as the Hornets came close to breaching the visitors' stubborn defence and Mackay is confident his side have enough to beat the drop.
He said: "I'm frustrated after that, just like my players.
"With the amount of chances we created we deserved something, if not all three points.
"That's as good as we have played in the first half. We peppered their area and the keeper made a great save to deny Jon Harley.
"We've got to win as many games as we can between now and the end of the season.
"There are a lot of points up for grabs and if we play like that the ball will drop for us and we will score goals."