Arsène Wenger believes Sunday's return to Manchester gives Arsenal the perfect chance to exorcise the humiliation they suffered the last time they played in the city, and prove they are back in the title race.

Arsenal were thrashed 8-2 by Manchester United at Old Trafford in August, a defeat that sent them to 17th in the Premier League with the prospects of qualifying for the Champions League appearing difficult and their ability to mount a championship challenge remote.

Yet Arsenal are now in fifth position and back in contention for a berth in the top four after a run of five wins in their last six league outings. They are conscious that if City are beaten at the Etihad Stadium it would cut their opponents advantage to six points.

Asked if the return to Manchester would provide an opportunity to overcome a psychological barrier Wenger said: "I believe you never forget that but you put it behind you. I never give too much importance to big scores because they are always under special circumstances. We conceded four in the last 20 minutes [actually three] when we were down to 10 men. We were still chasing to come back and every ball they hit went in the top corner. But it's part of football, and it's something we don't want, but I don't think that will even cross our mind."

Wenger added that a loss like that could aid his side's long-term development. "If you have a strong mental response from your players, if they are mentally strong, it can help," he said. "It took us a while to get over it, let's not fool ourselves, because we won one-nil with a lucky goal against Swansea [the following weekend] and we came back slowly. But there is something in the team that shows that we have the resilience."

Wenger was clear that if City are beaten then Arsenal should be considered serious challengers for the Premier League. He said: "We are on our way to recovery, but we have a big big test on Sunday and let's see how we survive that test. We are not yet in the title race. We have to come closer to Man City to be really in it, we are in a race for the Champions League places at the moment. And the purpose is to get closer and we have a good opportunity to do it."

In recent seasons Arsenal have lost Samir Nasri, Gaël Clichy and Kolo Touré to City as their billionaire Abu Dhabi owners have built a squad capable of being serious contenders for the Premier League. Wenger's ethos is to ensure Arsenal do not spend beyond the club's means, and while he would not be drawn if long-term success over City would bring personal satisfaction he did question whether Uefa's Financial Fair Play rules would actually be implemented.

He said: "I would get personal professional satisfaction to win the game. All these considerations of how much money they have and we have do not really come into the game, into your way of thinking for a game like that. You just want to do as well as you can. The question is will there be a financial fair play or not. It looks logical to have one but will it come in? I don't know. [Michel] Platini [the Uefa president] made it one of his priorities, so let's see if he's doing it."

Wenger also hailed the maturity of Robin van Persie, his captain who has scored 33 league goals in 2011. "For me Robin is a great leader, when he came to this club you would not have predicted that, that's credit to him. Seven or eight years ago, after Southampton for example [in 2005 when he was sent off for a challenge on Graeme Le Saux] you would not predict that this guy would become captain of Arsenal. He has been outstanding as a human being, not only as a player.

"We are a team that is mature in their behaviour because the age is higher. The players we brought in [the summer] like Mikel Arteta, Per Mertsacker, Yossi Benayoun, Park Chu-Young, Andre Santos - they are all between 25 and 30, they are men."