The Gunners put their title push back on track with a 3-1 win at West Ham on Boxing Day and will be hoping to end the year as top-flight leaders.
But Newcastle have moved within touching distance of the top four after a 5-1 thrashing of Stoke and Pardew believes Arsenal will not relish their trip to Tyneside.
When asked about the Gunners' good form, he said: "Yes they are, but so are we and I think they will be as fearful of us as we are of them.
"We are at home and we will be expected by our fans to win the game.
"We are looking forward to Arsenal as we have a lot of confidence. The spirit is very high and the team is working hard together. That's why we are going the right way.
"Arsenal are fighting to win the league. It's good, because we have played well against big teams.
"We try to play a similar way - we want to play good football. I think it's going to be a nice game to watch."
Pardew admits there is a healthy competition for places in the Magpies squad, which is stark contrast to last season when his side was hampered by a lengthy injury list.
"Last year, it was difficult to try to find 11 players to play. At the minute, it's difficult to find players to leave out," he said.
"We are in great shape and we take it into the next game. That's all you can do in my experience of this league."
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