There is no user setting for touchscreen sensitivity.
If your Apple Watch does not respond to touchscreen inputs as expected, then the following steps may help:
Remove any screen protector, case or bumper that you may have fitted to your Apple Watch.
Restart (normally) your Apple Watch and iPhone, turning both devices off together, then restarting your iPhone first:
If the issue persists, next unpair and re-pair your Apple Watch:
- The Watch app on your iPhone takes a backup of your watch automatically when unpairing via the app.
- Initially choose to Restore from Backup during set up (most data and settings will be restored, with some exceptions such as Apple Pay cards and passcode).
- If the issue persists, next try unpairing and setting your Apple Watch up as a new watch.
- Unpair your Apple Watch and iPhone - Apple Support
- Set up your Apple Watch - Apple Support
If the issue persists, then I suggest that you contact Apple Support (remote diagnostics and/or mail-in service may be available, if required), make a Genius Bar reservation or visit an Apple Authorised Service Provider for assistance: