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There can be several causes of a wavering speedometer. The VSS is the easiest to check. Remove it from the top of the differential then inspect it for signs of debris. If it is caked with shavings/grease you can try to clean it off then reinstall. If there is that kind of build up the rear bearings may be going bad.
The VSS on the rear axle is a likely issue. Check the connector on it also for damage or corrosion. When replacing use the Motorcraft part.
The PSOM and the RABS share the signal from this and I have noticed that sometimes the signal is too weak since disconnecting the RABS often gives the speedometer a strong or clean enough signal to work correctly.
It could also be the PSOM itself, but this is least likely.
VSS, tone ring (both in the differential), and PSOM (dashboard) can cause this. First you should check the differential, as already stated. The PSOM is the least probable cause. I have this issue where the speedometer needle will jump slightly. In my case, the differential gear imploded and damage a tooth of the tone ring (I was actually pretty lucky it didn't break it too).