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I have found a way to automatically set a ticket to “Awaiting reply” when an agent has responded using “Ticket Reply is Sent” as the Event. But I cannot figure out how to automatically set a ticket back to “open” when a requester then responds again. 

Workflow Automator:

Event: Note added is of type Any, Reply is received

Condition: Ticket Fields.status is Awaiting Reply

Action: Set status as Open, Send email to agent.

Because Freshservice uses order or Automator's make sure this Automator is towards the top of you Automator list.