Rooney believes it is already starting to look like a straight fight for the title between the two Manchester clubs and says the Reds are feeling good ahead of Sunday's showdown.
"It’s a massive game [on Sunday] and it was nice to get the win at Reading - we can go into the game knowing we are three points above City," Rooney told MUTV.
"It gives us that extra belief and confidence to go there and try and get the three points.
"It looks like it is starting to go that way [being a two-horse race], but this is a crazy league and anything can happen.
"We saw Chelsea at the top for the first eight or nine games and we were five or six points behind then, so you have to stay focused for all of the games and try to stay near the top of the league."