At a first sight I read "Via Ciamplong", in line with the local dialect, that today is admitted in official signals, actually not 50 years ago; expanding the photo it appears clearly "Rio Campolongo" in Italian. So the signal indicates a small stream (rio). Sorry for my mistake, but the substance is the same: the sign confirms Arabba.
There's no final proof, but i assume the pic was taken at or near via Mesdi in Arabba. I've set the pin accordingly, view goes to WNW.
There's some sort of balcony or bay (Erker) at the house at the right - might be visible on Streetview: external link - if this matches, then the house behind the "Trattoria" (house with Erker) is nowadays the Macelleria Delmonego in Arabba. The white house in the center doesn't exist any more, it's replaced by former Cesa Arnica.
Good: the sign indicates "Via Ciamplong". It is the road to Passo Campolongo and Val Badia.