Scunthorpe dropped to 23rd in the Championship after the loss to Watford, with Crystal Palace climbing one place after victory over bottom club Preston North End.
Steffen Iversen scored on his debut as Palace began life without George Burley with a 1-0 win at Selhurst Park.
Burley was responsible for bringing the former Tottenham striker to Selhurst Park but he was sacked following the 3-0 defeat to local rivals Millwall on New Year's Day.
Stephen Caulker denied leaders QPR victory with a dramatic late leveller to seal a 2-2 draw for Bristol City at Loftus Road.
Rangers, who dominated the game for long periods, were leading with six minutes to go through a penalty from Adel Taarabt.
As the game moved into stoppage time, Rangers failed to deal with Jamal Campbell-Ryce's corner and the on-loan Tottenham defender Caulker crashed a header into the net.
Norwich City moved into the automatic promotion places after claiming a hard-earned point from a 1-1 draw with Middlesbrough at the Riverside Stadium.
Leicester City moved to within four points of the play-off places after seeing off high-flying Swansea City 2-1.
Millwall stretched their unbeaten run to eight Championship matches by holding Derby County to a goalless draw at Pride Park.
Nottingham Forest moved to the brink of the play-off places as a Damien Delaney own goal gave them victory at Ipswich Town.
Shane Long grabbed a brace for Reading as they leapfrogged Burnley with a 2-1 win at the Madejski Stadium, after Ross Wallace had given the visitors the lead.
Hull City extended their unbeaten away run to eight games with a 3-2 win at Portsmouth. Barnsley secured a 2-1 win over Coventry.


