The Italian has called on his side to gain maximum points against Espanyol in order to capitalise on the result between Atletico Madrid and Barcelona
The joint Liga leaders lock horns at the Vicente Calderon on Saturday and Ancelotti is eager to take advantage of one or both of their title rivals dropping valuable points.
"Barca or Atleti? I don't know what result would be best for us. They can't both lose. We have to win to close the gap," Ancelotti told a press conference.
Madrid secured a comfortable 2-0 first-leg win over Osasuna in the Copa del Rey on Thursday thanks to goals from Karim Benzema and Jese Rodriguez, and Ancelotti was quick to praise the young Spaniard's form.
"He [Jese] had a great game. He worked a lot. He's an important player, in a good moment," he added. "The game was good defensively. We didn't commit any fouls. The defenders worked well together.
"We're close to the next round. The game in Pamplona will not be easy, so this was a good result."
Ancelotti also reiterated his intention to keep Alvaro Morata at the club, despite rumours linking him with a loan switch to the Premier League, and claimed the contract renewal of Xabi Alonso counts as a great signing for the club.
"My idea hasn't changed. Morata will stay. He hasn't asked to leave, either. I'm happy with him," Ancelotti added.
"We've signed a great player: Xabi Alonso."