Who has to indicate in this situation?

You answered correctly.

In this situation, both you (1) and the blue car (2) must signal your intended direction. According to German traffic rules, when there are multiple vehicles turning or merging, each driver must indicate their direction with the turn signal to clearly communicate their intentions to other road users and avoid confusion or accidents.

The red car (3) does not need to signal because it is continuing straight or not involved in turning at this intersection. The priority road sign also plays a role here, indicating which roads have right of way, but signaling remains essential when turning.

Understanding when to signal helps improve traffic safety and ensures that other drivers and pedestrians can anticipate your actions correctly.