And Nicholas believes come May, the Merseyside outfit, along with the Red Devils, will be left settling for another season without a place in Europe's elite competition.
Jurgen Klopp's side have started 2017 disastrously, failing to win a single league game, that has seen them uffer defeats to Hull and Swansea of late.
Charlie Nicholas isn't convinced Jose Mourinho can guide United to a top-four finish
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I think Liverpool have been sussed out and just aren't good enough at the back and I'm still not convinced United really have the right ingredients.
Meanwhile, Jose Mourinho's United are slowly on the rise after going 15 games unbeaten in the league – the longest undefeated streak across Europe's top five leagues.
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But former Arsenal forward-turned-pundit Nicholas hasn't seen enough from United's displays to see them sneaking into the top four.
"I have to say it's getting tremendously interesting, if a bit tense for me. Arsenal always seem to do this and then end up in the top four," Nicholas told Sky Sports.
"Yes, they are out of the title race now but I thought they were before the weekend.
Jurgen Klopp's Liverpool are yet to win a league game in 2017
Antonio Conte's Chelsea sit nine points clear of Spurs
"As the form stands right now it's obviously Chelsea, then Manchester City with the new superstar Gabriel Jesus, even if they still look susceptible at the back. Is he the replacement for Sergio Aguero? He is certainly providing the goals at the moment.
"Then I think Spurs will be in the top four. I'm not like some Arsenal fans in focusing on finishing above Spurs though. You don't get prizes for finishing above your rivals unless they finish second.
"I think Liverpool have been sussed out and just aren't good enough at the back and I'm still not convinced United really have the right ingredients. They have improved and they were very good against Leicester but there's other times they haven't been quite as fluent.
"I'm going to stick with the current four but I have to admit I'm really, really sketchy about Arsenal falling out. If I'm being honest with myself then Arsenal are in real danger."