So I did what you suggested and all good, but I also stumbled onto something very interesting, you don't actually need the Diagonals. Yes, check this out.
I have 4 Sprites for N,E,S,W setup in that configuration. I have the events setup so that "Is in Touch" so as you drag your finger across N Hero moves North, as you drag your finger across E Hero moves East and so forth, BUT Here is the magic IF your finger drags/is overlapping two sprites for example N and E the Hero moves NE, Yes diagonally North-East.
That is excellent, I am sure Ashley is going to be like duh I coded that in there :)
Nice find, saves me 4 other sprites or frames.