What is the right course of action now?

Your answer is fully correct because when another vehicle wants to overtake you on a two-lane rural road, German traffic rules require you to make overtaking safe and easier for the other driver. Reducing your speed helps create a safer distance and allows the overtaking vehicle to pass more quickly. Driving as far to the right as possible maximizes the available space and reduces the risk of collision. Indicating right is not necessary unless you are actually changing lanes or turning. So the correct actions are to slow down slightly and move right to assist overtaking safely.