Los Merengues head to Germany on Tuesday for their semi-final second leg with the Bundesliga champions, taking a 1-0 lead with them after Karim Benzema's goal at the Santiago Bernabeu last week.
Madrid warmed up for the clash with a comfortable 4-0 win over Osasuna, thanks to goals from Sergio Ramos, Daniel Carvajal and a Cristiano Ronaldo double, which Ancelotti felt was driven by his squad's sky-high morale.
"It is clear you can notice the good atmosphere in the club and with the fans," the 54-year-old told reporters after the game.
"As I said other times, this is important, it is very important that the atmosphere carries on like this to the following matches.
Los Blancos have been looking to add a tenth Champions League title to their collection since overcoming Bayer Leverkusen 2-1 in the 2002 final in Glasgow and Ancelotti is adamant that his squad can achieve the fabled Decima.
"Everyone is looking forward to see what happens and with this feeling the team can do more," he said.
"I am sure my line up in Munich is going to be made by players that really are looking forward to it. We are not going to invent anything in particular for this game.
"Everyone can be calm, because we are going to prepare for the match well. I trust a lot in our player and I think everyone has to trust them."