The wavy line is a tactical marking used to show that this plane belongs to Jg 54's III Group. Every plane in squadrons 7,8 and 9 has a wavy line in that squadron's color. When Jg 54 expanded to 4 groups, III Group changed it tactical marking to a vertical bar and the new IV Group began using the wavy line. Also, to round out how Jg 54 used these markings, I Group does not have a tactical marking at all and II Group uses a horizontal bar.
Each Jagdgeschwader (Jg) had their own system for the use of these tactical markings.