Comments from Bank of England Deputy Governor Breeden on energy prices and inflation cross the wires:Not at all obvious that there is a path to lower energy prices.Indirect pass through of energy price rises limited so far, suggests slack in economy.The larger and longer the energy shock, the more likely policy will need to respond.Balance of risk has shifted; risks crystallise increasingly likely BOE will need to respond.You can’t wait too long for conclusive evidence of 2nd round effects.I like to focus on what firms say about how they’re approaching pricing decisions.DMP survey, PMI, Agents' survey are important for me. Unlike 2022, we are starting at point where policy is restrictive.We have to take a meeting by meeting approach to rate decisions. Question for me is whether we need to do a 1st move, more uncertainty about whether we need to do lots moreAnalysis: Breeden’s message leans slightly hawkish, but it is conditional. She is concerned that energy prices may stay high long enough to affect what firms charge for other goods and services. That is why she is watching their pricing plans and warning against waiting for conclusive evidence of those knock-on effects before responding.There is a counterpoint in her remarks: the indirect impact of higher energy prices has been limited so far, which she says suggests some slack in the economy. She also comes from the perspective that policy was restrictive already. For traders, the question is whether that restraint holds or whether firms start passing more of their costs on to customers.Technically, GBPUSD is trading at its lowest level since the end of June and is testing a swing area between 1.3212 and 1.3219. Today’s low of 1.3215 falls within that area, so the sellers have reached support, but have not yet broken through it.A sustained move below 1.3212 would give the sellers another victory and shift the focus to the next swing area at 1.3171–1.3181. Below that sits the June 2026 low at 1.31393, the lowest level of the year and the lowest since November 2025.For traders looking to define their risk, 1.32729 is a more conservative level to watch. It marked swing highs and lows across June, July and August. As long as the price stays below it, the sellers remain in control. A move back above it would weaken the bearish bias and suggest that the break lower is losing momentum. This article was written by Greg Michalowski at investinglive.com.