The Gunners are four points behind fourth-placed Tottenham after grinding out a 1-0 win at Sunderland on Saturday, while their north London rivals stretched their unbeaten run to 10 matches with a 2-0 victory over Newcastle.
With Chelsea (third) and Everton (sixth) also involved in the battle, it should be a fascinating race for European qualification with 12 matches left in the Premier League season.
And with Spurs hosting Arsenal on 3 March, Wenger feels his team's current form gives them every chance of overtaking their fierce rivals and making the Champions League for a 16th successive season.
"We are in the fight and the game on Saturday showed that we are ready for a fight," the Frenchman said.
"Our character was questioned many times. "You saw on Saturday that we have plenty. I liked the last 20 minutes when we were pushed back. We headed every single ball. We tried like mad and that's fantastic to see.
"Sometimes you have to just dig in and some players played in uncomfortable positions. When we have the desire to win, it helps a lot."
One area of concern for the Gunners was that two of his key players, Laurent Koscielny (calf) and Jack Wilshere (thigh), suffered injuries on Saturday.
Wenger is hopeful both players will be fit for Saturday's FA Cup clash against Blackburn, although they may be rested with the Bayern Munich clash in the Champions League coming three days later.
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