I'm no expert but i would say you need to devise a way to determine how much of this extra weight is water and how much is fat. If only a small portion of the extra weight is fat then you might just continue as is because the water weight will come off very easily. There are also some things you can take to keep your body from holding the extra water while on cycle but i know nothing about them.
As for cutting while in cycle...
The general consensus is that you can't make gains while on a deficit. I strongly disagree with that.
Your body stores fat for when it needs extra calories such has when it needs to repair and build muscle. in other words, i believe if you're training on a caloric deficit your body replaces the extra needed calories by burning its fat stores. I have put on significant muscle and strength while on deficit and watched and measured my waist shirnk while my arms and legs grew. I do store most of my fat in my stomach, though. Just don't slack on the protein!
I do doubt the gains will come as readily on a deficit, though, and definitely don't go too low.
Also, in case I'm wrong, if you do decide to cut keep in mind that everything you're taking will help you to not lose muscle while training on a deficit. If you cut after cycle you will lose muscle. So it could be a pay me now or pay me later kind of situation.
Oh, if you're below a certain bf% it would not surprise me if your body had a physiological response causing it use muscle stores BEFORE fat because you need some fat for certain bodily mechanisms. So if you're below say 10% training on deficit could cut into your gains but my belief is you should be fine on a small deficit and still make some gains if you're over 12%....the higher the better