Watson suffered a groin strain while bowling on day one and had to leave the field for treatment, but was able to return.
He looked very proppy in his first over on Saturday and at times did not even break 120km/h.
Watson had bowled four overs to tea on day three and taken 0-13.
Australia have not changed their lineup in this Ashes series, but Watson appears the most likely player to go out of the side for the last Test in Sydney.
Team doctor Peter Brukner was still upbeat about Watson's fitness.
"He was a bit tentative in his first over, which was understandable," Brukner told ABC Radio.
"His second over was a bit faster and a bit better, he beat the bat.
"Hopefully we'll see Shane bowling a few more overs today and gradually increasing his pace."
Brukner also admitted that Watson's fitness is a constant concern for the Australian team support staff.
"He's probably our biggest challenge," Brukner said..
"But he's played every Test this year and he can usually get over his injuries much quicker now.
"We're keeping our fingers crossed for Shane."