The double champion is second behind Red Bull's Sebastian Vettel after eight of 19 races and his chances of cutting the 21-point gap on Sunday looked remote after the German triple titleholder and current champion qualifed second.
Lewis Hamilton took pole for Mercedes, a hefty 1.811 seconds ahead of Alonso.
However, the Ferraris have fared much better in races than on Saturdays this season and Alonso fought his way up to third at the British Grand Prix last weekend having started ninth.
He will try similar heroics in Vettel's German backyard after Ferrari made a deliberate strategic call not to fight for pole position and start the Spaniard instead on the longer-lasting medium tyres rather than the quicker softs.
"We took a decision thinking only to the race" said team principal Stefano Domenicali.
Alonso told his 1.7 million followers on Twitter that he was confident.
"Good qualy today! If we have good pace tomorrow, the different strategy we have chosen should help to recover good positions! Lets do it!," he wrote.
Pirelli motorsport director Paul Hembery said the call opened up good possibilities.
"The soft tyre was definitely the tyre to qualify on but those who start the race on the medium tyre might be able to gain track position when the soft tyre runners come in for their first stop earlier than them," he said.
"We're expecting most people to stop twice, with the emphasis on the medium tyre during the race."
Earlier, Alonso told reporters in the Ferrari motorhome that the Italian team had made a step forward.
"There is no doubt we are more competitive than we were at Silverstone," he said. "We have come back to a more normal level of competitiveness but we need to improve yet, no questions about that. We are at least more confident."
Alonso has won twice this season but has not started on the front row of the grid since he was in Germany last July, when the race was at Hockenheim.
The Nuerburgring can often be unseasonably cool due to the hills which surround the famous track but any hopes Alonso might have of rain bunching up the pack look doomed to disappointment.
The sunshine suited his bullish mood, especially when it came to driver safety after Pirelli's new tyres performed well during practice and qualifying.
Alonso was nearly hit on the helmet by a flying piece of tread at Silverstone last weekend when multiple tyre blow-outs caused chaos and led to most drivers warning that they would pull out of Sunday's German race if the same happened again.
"The tyres are still behaving well, I mean safe, with not any problems...so tomorrow, fingers crossed, it will be still the same," said Alonso, who was outqualified by team mate Felipe Massa in seventh and Toro Rosso's emerging talent Daniel Ricciardo in a heady sixth.
"There are not any signs that there will be any problems so that is the best news of the weekend."