Check to see if your touch object has "use mouse input" enabled. It's enabled by default. So, in your case you should either disable it, or use it instead of the mouse. You shouldn't be using both together, which is probably giving you weird results.
Hmm, how would I find it? After I embedded it, it just seems invisible to me. Sorry I feel like such a noob after all this that I couldn't find my answer in the manual.
EDIT: Ah, nevermind I found it lol. Now I have to wait until after work to sort this out, thanks!