I mount my lights right on the bars. The handlebar bag tends to block the light, though, so I get a BM Works Speed Extender -- a sort of handlebar extender-- and mount it pointing straight down. That lowers the bag enough so that it does not block the light.

Here's a link to the speed extender. cycle accessories | BM WORKS

And as it holds the bag on my Old Peugeot no. 1.