The City boss believes the Clarets have a number of factors in their favour ahead of the Saturday lunchtime Premier League clash at Turf Moor.
Firstly City have had little training time after their Champions League trip to Borussia Monchengladbach in midweek, while Guardiola also expects Sean Dyche's men to bounce back after last weekend's 4-0 thrashing by West Brom.
Guardiola said: "I saw their games
I am really impressed
I think it will be the toughest (game) for our regeneration, at 12.30.
"It is a derby, it is many things
We cannot forget they beat Liverpool, they lost in the 93rd minute against Arsenal and they draw at Old Trafford.
"What they do, they do really well
I am really impressed about their quality, their spirit.
"Of course they lost the last game 4-0 to West Brom, but I can imagine what happens when a team loses 4-0
Their attention and focus is higher than before.
"I prefer teams when they win a lot of games
They didn't win
So, in this moment, they are ready and prepared
In terms of intensity, I think they will be better
Their legs are faster and cleaner than ours.
"This game is key for us, so important in terms of the points and in terms of getting better at our kind of game."
It remains to be seen whether Yaya Toure returns after being ineligible in midweek but Guardiola believes the midfielder can have a big role to play this season.
Toure scored twice on his return to the side against Crystal Palace last week after the club's long-running row with his agent was resolved.
Asked if Toure could even feature in defence because of captain Vincent Kompany's continuing fitness problems, Guardiola said: "Yaya can play in many positions but I think we have other options to play as central defenders.
"Yaya is going to play in more offensive terms and can decide the last terms, to score goals, in our build-up in the last third of the pitch."
Guardiola revealed on Tuesday that Kompany was likely to be out for a number of weeks with a knee injury
The Belgian has since travelled to Barcelona for specialist assessment and the club now have a clearer idea of his prognosis.
"They confirm with what the doctor and the guys here said, and they said it is ligament and he will be four or six weeks out," Guardiola said.
Source : PA