Celtic named as Madrid’s toughest opponents this season in the Champions League.
Real Madrid have continued their unbeaten run with a 2-1 in over Real Betis on Saturday afternoon.
They will face Celtic at Celtic Park on Tuesday night in their first Champions League group-stage tie of the new season.
Ancelotti believes the Scottish side will pose a huge challenge like no other side in this group-stage.
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“On Tuesday we’ve got the most difficult game of this first half of the season,” Ancelotti said. “We’re going to be up against a team playing great football and we have to be ready.
“Our objective is to play good football and to pick up the points and the wins. We’re capable of playing well, with the quality we have, combining well and good in transitions. The squad dynamic is good and we’re full of confidence in our abilities.”