City were beaten 2-1 by Shakhtar Donetsk in their final Champions League Group F game in freezing Kharkiv. The result brought to an end a run of 20 successive victories in all competitions and was their first loss in 29 matches stretching back to April.
With top spot in the group already assured, it mattered little in terms of the Champions League but it was hardly ideal preparation for Sunday’s derby trip to Manchester United.
City boss Guardiola said: “It hurts. It is never nice to lose a game. But we have said many times we cannot win all the time, we are going to lose games. Today was the first.
“We needed to lose a game. It will be good for the club, for all of us and the media. People say things when you win a lot and you can forget that now.
“We saw many good things but we made mistakes and we are going to improve on that. Football is how you recover in the good moments and bad moments to stay stable.
“Now we prepare for Sunday and then after that think about Swansea and Tottenham.”
Watford boss Javi Gracia does not think Abdoulaye Doucoure's form will be affected by his omission from France's latest squad.