I did something similar for another post:
(open in Chrome as Firefox doesn't like multiple touches)
Your events 1-4 are wrong, touch doesn't work like that. You can't "pick touch instance" by comparing its coordinate, as you normally do with sprites etc.
You need to save touchID in a variable in "On any touch start" event. If it's on the left side of the screen, use this TouchID to control the left circle. If it's on the right, control the right circle. On touch end event, clear the variable and return the circle to its original position.