No one is underestimating City, and they need to fight for their survival in UCL for us to confirm that they are worth to qualify for the round of 16. Same applies to EPL, despite being the defending champions does not mean that if they don't improve their performance, they will be able to finish on top four. City have only won two weak teams and no one knows if they have improved or not.
Pep will continue to move to make improvements to the Manchester City team as time goes by because he himself is also very frustrated when the team he coaches gets bad results. So I also think that Pep will try to stay in the Champions League and also try to get a position in the top four zone in the EPL this season, although some other teams in the EPL will also try to take one of the positions in that zone. But for now Manchester City are not too far away from being able to achieve that although they have to fight harder.
He needs to do it soon if he wants to secure a place in the Play-off zone, but the problem is that in the next game Man City will face PSG who are also in desperate need of a win. This match is very crucial for Man City, they must succeed in securing victory in the remaining two games to survive in the UCL.
Guardiola will compete tactically with Luis Enrique to compete for three points, almost the same philosophy applied by both coaches makes this match very tense, Man City is a little under pressure because they will play at PSG headquarters.