he's more a silouhetto than a character at the moment. no hair ? no nose ? no mouth ? unsure whether we see hair spikes or ears (though i'd bet on ears).
still, there's is clearly potential. Maybe 3 colors is over-restrictive here. As for the palette, i'd suggest you give Arne's a try (it should be in the featured' chest, iirc) or maybe pick in the NES palette if you prefer.