Possibly the layers do not have the same coordinates/parallax values.
So Touch.X and Touch.Y coordinates actually end up being out of the visible screen.
You could confirm that using the debugger.
Also, apparently you are touching a TiledBackground object and moving your Sprite to the same layer. It is possible that in the Z order, your sprite is beneath the TiledBackground, and so "invisible" because of that.
Play with the Z order to make the Sprite appear in front of the TiledBackground.