FIX internal sequence numbers

FIX internal sequence numbers

I have a process between the Sell side client and an exchange that does
currency conversons. There are two FIX adapters - one recieving the
messages from the sell side and serving the messages to the process. And
another FIX engine that takes the messages from the process and sends them
in FIX to the exchange.
Every FIX message has a unique sequence number dented by tag 34. However,
it seems that each of these FIX engines has a INCOMING SEQUENCE number
(what FIX engine is expecting for counter party) and an OUTGOING SEQUENCE
NUMBER (what FIX engine is sending to counter party).
Are these internal sequence numbers independent of tag 34?
In this configuration the Sell side FIX ENGINE's internal sequence numbers
are reset to 1,1 upon login. The internal sequence numbers of the FIX
ENGINE to the exchange are not reset to 1,1.
I am guessing that this is because there might be GTC orders resting at
the exchange and the two engines might 'sink up' on these resting orders
upon a successful logon.
However I don't understand the relation between tag 34 and the internal
sequence numbers.