What is the right course of action?

You answered correctly by choosing to move first.

Here's why: In this situation, you have the right of way. The yellow car is waiting at a priority intersection (indicated by the triangular warning sign with a crossroad), and it must yield to the main road traffic. Additionally, your lane markings and the direction indicators show that you are allowed to proceed.

According to German traffic rules, vehicles on the main road have priority over those entering from side streets. Since you are driving on the main road and the yellow car is waiting to join, you move first.

This understanding of right of way at priority intersections will help you handle similar situations confidently in the future.