In a large mixing bowl, combine warm water with yeast & sugar, Set aside for a few minutes to proof & become bubbly.
Add the egg, salt & oil; blend in. Combine flour & dry milk powder. Slowly start adding flour/milk mixture, stirring until you get a soft, pliable dough. Cover with a tea towel & set in a warm, draft-free place until dough doubles in size.
Once the dough has risen, divide one quarter from the main ball & set aside. Roll the remaining dough into one long ‘snake’, with the middle being the widest & tapering slightly at the ends. Shape into a pretzel on the prepared baking sheet. Divide the remaining quarter of the dough into three equal pieces & roll into long, even ‘snakes’. Braid together.
Whisk together the egg wash & generously brush the entire pretzel. On the bottom part, attach the braid. Brush the braid with more egg wash & sprinkle with pearl sugar & sprinkle with cinnamon if you wish. Place in a warm draft-free place & allow to rise for about 15 minutes.
Preheat oven to 350 F.
Bake pretzel for 20 minutes or until golden brown. Allow to cool slightly on a wire rack before serving.