What does this traffic sign indicate?

Your answer is correct. This traffic sign means you are only allowed to drive straight ahead. It is a mandatory direction sign in Germany, indicating that turning left or right is not permitted at this point. Be sure to follow this sign whenever you see it, as ignoring it could lead to a fine or dangerous situations. It does not indicate priority over oncoming traffic, nor does it mean you are on a one-way street. Remember to always continue straight until the next sign or intersection allows a different direction.