The former world champion still harbours ambitions of taking on The Gypsy King in a long-awaited bout despite Fury announcing that he was hanging up his gloves last month.
Joshua told iFL TV: "I feel like it's the best fight [for me].
"People might say [Joseph] Parker, people might say - I don't know.
"But I think Fury, commercially, is a great fight and it's a great man's fight as well. So I think it makes sense.
"You could say it's been years in the making. But listen, the heavyweight division has been thriving.
"And why I say it's probably still a great fight is as I said Parker is, for me, a great story of someone that never gives up.
"And the thing is, there is going to be one winner and one loser and there's going to be bloodshed. And it ain't gonna be mine."
Fury has performed U-turns after announcing his retirement in the past and Joshua doesn't think the sport has seen the last of the former world champion.
The boxer said: "Has he retired with the possibility of coming back? Yes. Has he retired? Yes. Is he going to come back next month? No. In short, he might come back but he is retired."
Joshua hasn't competed since losing to Daniel Dubois last September but promised that he does have more fights in the pipeline.
When quizzed on a return to the ring, he said: "More fights, this is my life, this is what I do.
"Right now I sit outside and I watch and then I'll make my return one day.
"Right right I sit back as a fan and watch the great people in the sport I love."