City lead Schalke 3-2 going into Tuesday's last 16 second leg tie at the Etihad Stadium.
“We have a tendency - myself as well - that when we see a draw, we always say who is going to win," Guardiola said.
“After the first leg, everybody knows who is going to win the second one. A week ago we didn't expect PSG would happen, or Real Madrid. Every game is completely different, but when people say there is nothing to do, you can have one red card or one goal in the first minute.
“Many things can happen in 90 minutes in this kind of competition. In 90 or 180 minutes, everything can happen — but we want to compete against them. We want to face them. We have the desire to compete with with the best in Europe.
“Hopefully [we'll be] in the quarter-finals and after we will see if we can be there. The teams there will be a similar level to Real Madrid - they are top teams.
"I said many times all the clubs in the group stages, the last 16, last eight, want to win. It's another step, but it's difficult. In the last 16, if you go out, it's a big disaster.
“But it's a big success, being here, and we're closer to doing that."