United are three points ahead of unbeaten City, who themselves are seven clear of third-placed Chelsea.
Yet the duo have come in for strong criticism, which has intensified this week following the Red Devils' woeful defending at Reading and the Blues' dismal Champions League exit on the back of the worst performance by an English team in the competition's history.
"We are both in a similar situation," said Giggs.
"We are in a good position in the league but haven't hit the form we did in parts last season.
"That can be frustrating because we want perfection.
"We want to be the best team and each individual wants to be the best player.
"We must be doing something right because we are in a good position and there is the belief we can score goals.
"But that doesn't mean we should neglect our defending and not try and stop the goals we are leaking because we need to stop conceding them."
Giggs boasts a record 35 appearances in the fixture, which he accepts has increased markedly in intensity since Sheikh Mansour began pouring huge amounts of cash into Etihad Stadium coffers.
Yet the veteran Welshman refuses to lift City above any of the other fierce rivalries United have had down the years.
"It doesn't mean anything extra because it is City," said Giggs.
"There are different rivalries.
"Liverpool has always been the biggest rival for me. It has always been the biggest test.
"Arsenal were a brilliant team and we had some ferocious battles with them. Chelsea were also a brilliant team under (Jose) Mourinho and now City are a good team as well.
"The added dynamic is that they are on our doorstep. But we still want to win the league no matter who we are competing against."
Yet, whilst Giggs agrees with Sir Alex Ferguson's assessment that Chelsea cannot be written off, after losing out on goal difference to a side they failed to collect a single point off in their two meetings last term, the Welshman is aware how significant Sunday's game can be.
"We have found over the last couple of years that the derby, with the money City have spent and the quality they have brought in, has got bigger and bigger," said Giggs.
"The two games against them were the difference last season. Hopefully we can get the right result and that will be the difference come the end of this season."