Q: Disconnection

It is normal for your Apple Watch to become disconnected from your iPhone if the two are taken out of range of each other. They should then reconnect automatically when brought back into range.

Check that both Bluetooth and Wi-Fi are enabled on your iPhone (Settings > Bluetooth / Wi-Fi).

Check also that Your Apple Watch is currently connected to your iPhone: Swipe up on the watch face, swipe left/right to the Settings Glance, check whether Connected or Disconnected (disable Airplane Mode if it is active).

Check that your iPhone software is fully up to date:

Update the iOS software on your iPhone, iPad, and iPod touch - Apple Support

Check that your Apple Watch software is up to date:

Update the software on your Apple Watch - Apple Support

Then try restarting - or, if that doesn't work, force restarting - both devices and see how you get on over the next couple of days:

Restart your Apple Watch - Apple Support

Restart your iPhone, iPad, or iPod touch - Apple Support

There may be an issue with your iPhone software. To check this, try resetting your iPhone and restoring from backup:

Backup your iPhone:

- via iCloud (encrypted as standard) or

- via iTunes (choose to "Encrypt iPhone backup", so that the backup includes saved passwords, Wi-Fi settings, website history and Health data).

About backups in iCloud and iTunes - Apple Support

Erase all content and settings on your iPhone:

Erase all content and settings on your iPhone, iPad, iPod touch, or Apple Watch - Apple Support

Restore iPhone from backup:

Restore your device from an iCloud or iTunes backup - Apple Support

You may have wireless interference - try changing Wi-Fi channels on your wireless network (note that Apple Watch can only connect to 802.11b/g/n 2.4GHz Wi-Fi networks):

Wi-Fi and Bluetooth: Potential sources of wireless interference - Apple Support

I'm having the same issue and someone I've replied to earlier is too.  I'm thinking it has to do with the recent update.  I also can't keep my phone connected to wifi, which others have said they can't either since the update.