What is the right course of action now?

Your answer to brake is correct because even if you have priority, you must always adjust your speed to the traffic conditions ahead. In German traffic rules, having right of way does not mean you can drive unrestricted or accelerate; safety and control are paramount. If the vehicle ahead is slower or the road is narrowed by parked cars, braking or slowing down is the appropriate reaction to maintain a safe distance and prevent collisions. Swerving left or accelerating without regard to the situation would be unsafe and contrary to traffic regulations. Always prioritize safe driving over using your right of way aggressively.