Australia are on the brink of making the last four after two victories in as many matches while South Africa suffered their second successive loss.
Watson produced another scorcher after the 42-ball 72 against the Indians Friday.
South African speedsters Dale Steyn and Morne Morkel were on top of Watson and his opening partner David Warner (5) at the start of the chase. But once the star all-rounder cut loose, he was unstoppable.
In Image: Australia's batsmen Michael Hussey, left, and Cameron White celebrate their victory over South Africa