Yes dd has certainly had a lull in year 3, probably due to laziness or not really gelling with this years teacher.
I think she had various level 3 results at the end of y2, I forget now, the levels are useful, but not the be all and end all. Dd is very good in literacy and science, although has atrocious lazy handwriting, decent although less enthusiastic about maths.
I don't really think you can predict progress as like a previous poster said it comes in fits and starts. Dd was very upset to be overtaken in the reading level stakes, she had been top of the class for R,Y1 and Y2. I did point out to her that her school reading book had been languishing in the bottom of her school bag for quite awhile and that if she actually read her scheme books, I could sign her record and she would go up a level
.
I thought this might spur her on, but she got over her competitive streak .
Your dd is obviously bright and doing well, she should be aiming for a level 5, or who knows, a level 6 at the end of y6.
My little niece despite never really being top of the class etc got all 5's in y6 and came top in the whole year for a maths test in y7 at a very good school .