Charlie Nicholas says Arsenal's Premier League clash at home to Tottenham on Sunday is more important than Wednesday's trip to Bayern Munich, where they were beaten 5-1.
The Gunners' Champions League knockout qualification hopes now hang in the balance after Bayern's dominant display, with Arsene Wenger's side needing to win both their final Group F games against Dinamo Zagreb and Olympiakos while hoping other results go their way if they are to progress.
But with Arsenal joint-top in the Premier League table with Manchester City, Nicholas told Sky Sports News HQ the north London derby is the more important encounter.
"Arsenal have a real momentum and belief that they can challenge for the Premier League this season," said Nicholas.
"Ozil's form is much improved, we know what Sanchez gives you, and Giroud gets another goal tonight. Of course in two weeks time, you'll have Walcott coming back, and Ramsey coming back.
Live Ford Super Sunday
"It's a much more important game [against Tottenham]. This is about survival in the Champions League at the moment. If it doesn't happen, it doesn't happen.
"Arsenal's seriousness this season is in the Premier League."
Although Nicholas added he expected Arsenal to lose at the Allianz Arena, the former Gunners striker criticised centre-back partners Per Mertesacker and Gabriel for being "slow".
"It's damaging, of course it's damaging, but I expected to get beat tonight. But it can happen to you. Arsenal beat them 2-0," added Nicholas.
"As early as the 10th minute, Lewandowski was just floating off the runners. Gabriel went to sleep and Petr Cech had no chance.
"Mertesacker was slow, Gabriel was slow. Campbell couldn't double up.
"But Arsenal actually should have scored another two or three. I know Bayern had taken their foot off the gas, but the second half was much better.
"I know it was an embarrassing result, but the second half was much, much better."