Well
I believe you can cut fat and preserve most of your muscle. I don't believe that you will be as strong for these reasons:
During fat loss you must cut calories in order to burn fat. Cutting calories means less energy, so you won't be able to put out as much power when lifting. After your cutting cycle is over you can reach the same poundage again within a few weeks. The most healthy amount of fat loss is 3 pounds per week. Most people don't burn that much in a week, but it can be done. If you lose any more than that, then you're losing hard earned muscle.