。
The arrow indicates which way to go.
Literal
Arrow [subj-が] advance-[should-べき] direction [obj-を] indicates.
Showcases ~べき as a prenominal modifier — 進むべき方向 literally 'the direction (one) should proceed.' ~べき directly before a noun functions adjectivally. 指示する ('instruct, direct, indicate') is a more formal synonym of 示す, common in technical and bureaucratic writing.