The 17-time Swiss grand slam champion arrived in Australia on Saturday with Sunday's Brisbane International tournament as his lead-up to this month's Australian Open in Melbourne.
Federer, 34, who won six titles including Brisbane last year and reached the final of both Wimbledon and the US Open, is up against world No.8 Kei Nishikori, No.14 Milos Raonic and No.28 Grigor Dimitrov in this year's Brisbane tournament.
"The likes of Nishikori, Raonic and Dimitrov want to move now finally into the top four or five and for us, the top guys, it's about hanging on where we are right now," Federer told reporters.
"I've been playing really well for over one and a half years - ever since I came back from my back problems in 2013.
"That's been very encouraging and now I'm just more confident than I was maybe a year ago as well."
Federer won the last of his 17 grand slam crowns at Wimbledon in 2012 and he still believes he has another major title within him.
Novak Djokovic dominated last year with three grand slam titles, and while the wait for an 18th slam title is stretching out, Federer said he was not voverly concerned.
"I've come so close, I've played very well, but I don't feel any frustration because of it," he said.
"I'm still happy with how I'm playing. It was Novak's year, he played so well there's only so much (you can do) if somebody's so dominant and he's got sky-high confidence.
"It's unfortunate, a pity for me, but at the same time I don't feel sorry for myself. I've won so much throughout my career, I feel like if I keep pushing forward it might happen.
"If not, it's okay."
It is Federer's third trip to the Brisbane International and not only did he win last year's title but he joined rare company by picking up the 1000th match win of his ATP career in the process.
Federer has a bye into the second round this year where he is due to face either Australian wildcard Ben Mitchell or a qualifier.