your needle is clear of the foot.
if you think that you cannot move your needle position, try adjusting the "width" of your straight stitch. sometimes that will do it. if not, then you might need to get by with just attaching a guide to the throat of your machine and moving the guide until you find the right position.
to finish up the test, cut yourself a new set of 2 by 4 inch pieces of fabric. start by moving your needle position one click to the right if your earlier piece of fabric was too small, and one to the left if it was too big. stitch your seam, press, 