After seeing the game between Manchester City and Arsenal that ended the way it ended, I think Madrid will be more confident that they can win the fixture against Manchester city and city will have their confidence tampered as they were literally humbled by an epic scoreline in the yesterday's fixture. I n this fixture it's sad that winning is the only option for either teams as they cannot draw and still have a chance so it's going to be a really epic and yet intriguing game between both teams.
Well, they still got FA cup game before the playoff 1st leg against Real Madrid. If they can win, it will boost their morale but if they lose, it will only make things worse. But I must say I'm disappointed at their performance at the weekend. They can lose to any side at their worst moment but to lose in the manner they did against Arsenal was quite shocking. Goals were pouring in like free booze and Pep couldn't do anything to stop it. From their recent results, it's quick for anyone to write them off but I hope they put up a good fight against Los Blancos.
They are not going to lose that game unless Guardiola will heavily rotate out his best players in order to make sure that none of them gets injured before the most important games of the season against Real Madrid. But if they lose that game for some reason, it would most likely not make things much worse. I think it would raise the pressure tremendously to get something done in the Champions League. But anyway yes it would be bad morally, not really anything positive about losing.