The match at the club's new stadium is likely to be a stiff test for Real, who are seven points behind leaders Barcelona with just over half the season played.
Espanyol, one of the surprises of the campaign, are sixth and Pochettino said he would not compromise on the club's attacking style against Jose Mourinho's Real side.
"We are a team who goes on the offensive from the start, continually, and Madrid will no doubt do the same," the former Argentina international told a news conference on Wednesday.
"That's why I expect a match with plenty of end-to-end stuff on Sunday."
"We have some difficult away matches still to play and we already slipped up in our last two," he told local media on Thursday. "We have no margin of error because that would mean practically saying goodbye to the league title."
"It's great news," Barca's Brazilian defender Maxwell said in an interview with the club's TV channel on Wednesday.
"We are all very pleased with him. We always try to respond with work and effort."
Atletico coach Quique Sanchez Flores is under pressure after a run of three league defeats and they have won only one of nine matches this year in the league and King's Cup, denting their hopes of qualifying for next season's European competition.
"We are in a difficult situation after consecutive defeats," defender Diego Godin told a news conference. "Now there is nothing else for it but to look ahead to the Valencia game and go out to beat a tough opponent."
