Mikel Arteta's men went into the international break on the back of a disheartening four-game winless run in the top flight, which has left them fourth in the Premier League table and nine points adrift of runaway leaders Liverpool.
Arsenal are one of four teams on 19 points after 11 matches, the others being Chelsea, Brighton & Hove Albion and upcoming foes Forest, who have been one of the Premier League's surprise packages under Nuno Espirito Santo in the 2024-25 campaign.
Previewing the game for Sports Mole, Watts expressed his belief that Saturday's visit of the Garibaldi is Arsenal's most important match of the season so far, as a perfect winning run between now and the New Year is imperative if the Gunners are to claw back their deficit to Liverpool.
Asked if the visit of Forest could be a banana skin for Arsenal, Watts replied: "Definitely, definitely. They used to struggle against Nuno's wall sign as well, and I do see a bit of that Wolves side in this Forest team. They're very, very good defensively now. They don't concede many goals, taking away the second half against Newcastle before the international break.
"They're a real threat on the break with the pace that they have in their wingers and Morgan Gibbs-White and they showed what they did at Anfield, they had to ride their luck a little bit at Anfield. Liverpool could have scored in that first half, they didn't. As the game wore on, Forest grew in confidence, they picked them off on the counter-attack and scored a really good goal, and Arsenal are going to have to be at their best for this game.
"They [Forest] are away from home, they are a really difficult team to break down and to beat. But for Arsenal, this is massive. Honestly, I look at this game, I think this is Arsenal's biggest game of the season. They've had so many difficult away games, big games against [Man] City, Chelsea, Spurs and all that, which maybe create more attention ahead of them. But for Arsenal, I think this is the biggest game of the season.
"They have to win. This period they've got now coming up to Christmas and coming up to the New Year, I think they've got seven games maybe before New Year's Day. For me, they have to take 21 points from those games. They are on paper all fairly winnable, it's easier said than done obviously in the Premier League, but they are fairly winnable.
"If Arsenal want to get themselves back in the title mix, they have to try and look at these seven games and think maximum points. You have to start off well at home to Nottingham Forest, poor result in this game, and you're virtually looking at curtains almost for the title race for Arsenal. It's so important. They get some momentum now after all those difficult fixtures, and they've got to start with a win."
Arsenal emerged triumphant in both meetings with Nottingham Forest last season by a 2-1 scoreline, most recently leaving the City Ground in January with a narrow win under their belts, which marked the second of their eight successive Premier League victories from January to March.
Arteta's side went on to score a combined 24 goals in their next five games against Liverpool, West Ham United, Burnley, Newcastle United and Sheffield United, and Watts believes that beating Forest on Saturday could be the "catalyst" for another string of victories.
Could an Arsenal win over Forest spark a Gunners revival?
"When you go back to last season, that incredible run they went on from January onwards, I look back to the game against Nottingham Forest right at the start of that run, I think they'd maybe won one game before that. They went to Forest and they won 2-1 at the City Ground. It wasn't pretty, they didn't play that well, but they ground it out," Watts added.
"They got a really important win. And that was the catalyst because then they went to West Ham, won 6-0, and then the goals just started flying in left, right and centre. We saw them get on that run. It was a real catalyst, I thought, that win at Nottingham Forest for Arsenal to do what they did in the second half of the season. And I really look at this game as something very, very similar. They need to get momentum.
"They need to get their confidence back. They've gone four games without a win. That can't go to five. They absolutely have to win this game. I think it's the most important game of the season, no doubt. I really feel these next seven games, they've got to definitely aim for 21 points out of these next seven games. It's crucial.
"And yes, Forest have caused teams problems. They've had a really good start to the season, absolutely. But if Arsenal want to get back and close the gap on Liverpool, they've got to win this game and find some momentum. They can't continue with where they left off before the international break with two points from 12. That can't then go to three points from 15, for example. A draw just wouldn't be good enough in this game. They have to win it. Absolutely. It's crucial."
Arteta is sweating over the fitness of a few key players before Saturday's game, as Declan Rice and Bukayo Saka both withdrew from the England squad, while Leandro Trossard also picked up an unspecified issue in Belgium's UEFA Nations League loss to Israel last weekend.
Arsenal's 2-1 victory over Forest at the Emirates last season marked their fifth straight home win over the Tricky Trees, who have not beaten the Gunners away from home since a 3-1 triumph at Highbury in 1989.
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