Liverpool are second in the Premier League, seven points behind leaders Chelsea with a game in hand, but 11 points clear of United, who are sixth with no realistic chance of retaining their title.
Former Liverpool striker Ian Rush said earlier on Friday that Liverpool go into the match as the clear favourites and Moyes did not disagree.
"Their league position suggests they are ahead of us and they possibly do come here as favourites. Liverpool are having a very good season and we will have to do everything we possibly can to beat them."
Liverpool, who have won their last four league matches, have not finished above United since 2002 and although they look like doing so this season, Moyes told reporters at his pre-match news conference that United still had plenty to play for.
"It would be a big boost for us to win on Sunday," he said. "I think everyone knows the importance of Manchester United v Liverpool games.
"I think it is the biggest game in the country. There is great history between the two clubs going back years and I think this is the biggest club game in the Premier League."
Liverpool (18) and United (20) have won 38 league titles between them.
United, who finished champions five times and runners-up three times in Alex Ferguson's last eight seasons in charge at Old Trafford, have not finished outside the top three since 1991, but they will almost certainly do so this season.
Moyes, who has had a difficult introduction since succeeding Ferguson at the start of the season, said there was plenty of positives to take from their recent form, having kept clean sheets in their last three league matches.
"We are not in as strong a position as we'd like, but we are normally very good coming into the final furlong and we have big games coming up this month. Our motivation is to make sure we keep progressing," he said
Their only defeat in the last six weeks was a 2-0 reverse at Olympiakos in a Champions League last 16 first leg last month.
Moyes added: "With the exception of Olympiakos we have been progressing and improving. I see signs of it in training, the players are looking well and sharp and I am looking forward to it."
Striker Robin van Persie appeared on Thursday to allay fears that he was looking to move away from Manchester United by saying he wanted to stay beyond the end of his current contract and that he had learnt a lot from Moyes' training sessions.
"It's nice of Robin. Robin is happy here and we are very pleased about that," a naturally delighted Moyes said.
"He has a couple of years left on his contract and I am sure that's something the board will look at. I have always said we have two outstanding forwards in Wayne Rooney and Robin.
"Both of them are capable of winning games on their own and both are pivotal international players for Holland and England and are the sort of players any side in Europe or the world would want in their team.
"I am delighted to have them here and that both of them want to be Manchester United players is even better."
Winger Nani has returned to the United squad ahead of Sunday's match at Old Trafford, while Rafael, Javier Hernandez and Jonny Evans all have a chance of being involved, Moyes said.
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