There's no sign to show that Manchester City is capable of winning UCL or to be on the finals this season. The team is facing hard times due to injuries, and the bad part of it is that in UCL any club can take advantage of your weakness for easy step up to the next level.
What Pep needs to focus on currently, is how he can manage the other players that he has so that more don't get injured, if not it will be a disaster to the club. I don't see Manchester City winning their domestic league this season, because Rodri injury put him out of the season.
There are as many signs that Manchester will not win the Champions League as there are signs that they will in fact win the trophy. The mini crisis they are going through has literally zero impact on the outcome in the Champions League. Everyone knows that the team is still among the best in the world. Having a losing streak doesn't change the fact that there 11 players on the field able to beat any team in the world and for as long as that is the case, they have as much a chance to win it as any other team of that quality.