This study aims to develop a two-dimensional dispersion relation-preserving Petrov-Galerkin finite-element model for effectively resolving convective instability in the simulation of incompressible viscous fluid flows in moving meshes. The developed test functions, which accommodate better dispersive nature, are justified through the convection-diffusion equation and the Navier-Stokes equations. For moving-boundary problems, the fluid flows over an oscillating square cylinder and are investigated in the contraction-and-expansion channel. Through several benchmark tests, the dispersion relation-preserving Petrov-Galerkin finite-element model developed within the arbitrary Lagrangian-Eulerian formulation has been shown to be highly reliable to investigate a wide range of incompressible flow problems in moving meshes.