'Remove and Redo' is your friend!
Go to Account Transactions in the bank account and search for the incorrect entry. Tick the entry and then click ‘Remove and Redo’ (top left, just above the date column).
Xero will ask you to confirm this action. Confirm it.
Don't worry - it doesn't delete the transaction in the bank account! 'Remove and Redo' simply puts the entry back into your unreconciled items.