The Lankans finished a rain-hit third day today on 194-5 in their second innings, a lead of 40.
Moody said: ''Chasing runs in Test cricket when a wicket is deteriorating slightly is a very tough task and even tougher when you've got someone like 'Murali' to face on a wicket showing obvious turn.
''I would think a lead of anything above 130 or 140 would be challenging (for England) and we would feel very much in the game.'' England coach Duncan Fletcher was frustrated about the time lost to rain but said: ''We just have to give credit to how the Sri Lankans batted. The wicket seemed to improve and it played quite well as far as the seamers were concerned.
''A target around about 200 in a fourth innings of a test is always a challenge. Somewhere around there.'' Sri Lanka owed much to opener Michael Vandort whose 89 not out helped steady the ship after his side dipped to 56-4.
''He showed a lot of character,'' said Moody. It was a big innings for him and as far as the team went. He played straight and showed a lot of patience.''