There is an "increasing chance" of a tropical cyclone forming in the Coral Sea off Queensland late this week, the Bureau of Meteorology (BOM) says.

Key points: BOM is monitoring a trough over the Gulf of Carpentaria

BOM is monitoring a trough over the Gulf of Carpentaria It says a tropical cyclone would most likely move away from the Queensland coast

It says a tropical cyclone would most likely move away from the Queensland coast Several towns in the south-west have recorded their largest flood peaks in years

Forecast models show a monsoon trough deepening and the BOM said conditions were favourable for a low to develop within it and potentially increase to tropical cyclone strength.

Senior forecaster Michael Knepp said BOM was monitoring the trough over the Gulf of Carpentaria, which was "fairly active right now".

"We will see a low develop along the monsoon trough over the next few days [and] it will actually deepen as it goes into the Coral Sea," he said.

"At this stage, the most likely scenario is the tropical cyclone, when it develops, will move to the south-east away from the Queensland coast.

"More than likely we'll see [it] develop … Friday or into the weekend."

Some modelling suggests it could move towards the coast or south, but Mr Knepp said that was less probable.

"Those are least likely scenarios," he said.

"In the most likely scenario, if it moves to the south-east we'll see mostly fine weather develop across most of the state for the weekend into the start of next week."

'Quite a wet week'

Meanwhile, senior flood forecaster Jess Carey said the tropics were expected to endure "quite a wet week".

"The worst of the rainfall over the last few weeks has been in that southern central inland region … so catchments are somewhat primed for this week and we will be watching it quite closely," he said.

An initial flood watch was issued yesterday afternoon for the Cape York Peninsula and coastal catchments south to Mackay, amid predictions widespread heavy rainfall was possible from Wednesday and could lead to flooding.

Mr Carey said several towns in the state's south-west, including Quilpie and Thargomindah, had either recorded, or were about to, their "largest flood peaks" in years.

"At this stage, no record river levels have been broken so far, but certainly we do have quite a wet week to come, so will be watching the north tropical coast very closely over the coming days," he said.