The Minstermen are favourites for the National League North title with some of the bookmakers.
The former Gateshead boss, who will now come up against his old club next season, says it is too difficult to make a championship forecast at this time of the year.
York have been busy and on Friday added Blyth Spartans goalkeeper Pete Jameson.
In an interview with the York Press, Watson says he does expect his team to be ‘up there challenging’.
But he knows all too well how often things change once the first ball is kicked.
“When I was at Macclesfield, we were tipped to be near the bottom of the National League,” he said.
“We ended up winning the title by ten points, so I don’t pay much attention to the odds.
“But we had a very good finish to last season and our budget is the same for next season.
“You would expect the club to be one of the favourites, as they would have been this time last summer.
“I fully expect us to be up there challenging, although I don’t expect it to be easy because no division is where only the champions go up automatically.”