Using the precise resolutions/AR you specified for the images, both my method and Nat's were tested here in v7.32, which is the latest. In each case, the overlay moved smoothly from off-screen left to off-screen right. No clipping, no need for A/R effect.
For positioning, the image in the preview screen was dragged, not the circle base line in the sequence screen.
Test v7.32. If registered, keep your old installer on hand, though it's usually stored on the PC automatically. For licensed users upgrades are free for up to six months. After that, VP will continue to fully function but a fee will be required in order to register the newest.
During position manipulations the PV overlay image has a tendency to vanish, though the positioning box remains. That behavior may be a bug. Reported. You can do that as well by clicking on the chevron at the top-right of the VP window and choosing to Send Bug Report.