If the fluctuating is seemingly random, this is what happened to me when the temperature sending unit was failing. It would read high for a while, then bounce back down to normal---sometimes just bounce around within a range.

A new sending unit cured the problem. But definitely check the wiring, connector at the head, and engine ground, as was mentioned, before suspecting the sending unit.

__________________
1981 300TD 310k miles
1970 280sel 172k miles
1966 230 Fintail 162k miles

"Where are we going? And why am I in this hand basket?"