Both are interesting ideas. Do you think I should paint the single recessed wall a dark colour to make the recess seem deeper? Also what do you have in mind when you say neutral on neutral vertical stripe?

Agree with judishines above...what beautiful goblet pleated drapes! If you could get more of the drape fabric you could dress the bed niche with fabric too look like a bed canopy. Love the grass cloth idea for the walls, and another option would be to have the walls upholstered in a neutral linen which could look fabulous in a small space.

I was thinking of a vertical stripe wallpaper, although you could do the same with paint -- one color that is near the background color of the curtains and then another neutral -- maybe a lighter vanilla, tan, or soft white, just to add some depth to the plain walls and to accent the curtains. It's a small room. Maybe two-inch wide vertical stripes? The grasscloth would look fantastic -- adds texture and warmth without overwhelming a small space. I have recently had an upholstered headboard custom-made for a small space, just with a thick foam covered in fabric. You could do that for your whole recessed wall -- floor to ceiling and have a dramatic headboard without overwhelming a narrow space. That way, anyone could lean against the wall and have a soft headboard and the wall would be totally accented.

I would use a dark wood head board and other furniture to pull out the contrasts on the curtains. Organic greener on the recessed window shelf and green accents around the room, toss pillows, pictures or 2. maybe a chair.

I would use some of the new taupe colors. It will add color and you can tie in the black that is in the curtains with decorative touches such as pillows or even furniture with a black stain. You can also add iron work type decorations

Love to see a photo of your headboard if you have one. Ref the stripes do you think this would work:

Please look at Ben Moore Slip in the Affinity collection. It is a very calm,peaceful lavender. I used it in my guest room and everyone who stays (male,female,young,old) comments on what a pleasant room it is.

Those stripes above seem wide to me, and horizontal. They might overwhelm your delicate print curtains. The taupe color idea is a great idea, too.

Here's the headboard. It's horizontal -- runs basically across an entire small room wall to complement horizontal windows above. It's neutral because the room is small and I didn't want the headboard to bring the room forward visually, so I just accented with pillows. Spread and skirt are neutral, too, to make the bed appear smaller in the room. It worked!

The headboard is about 2 inch-thick foam covered with a fabric remnant in a scrubby linen weave. You could have 2 inch-thick foam cut the whole size of your wall and then have it covered in fabric before you attach it to the wall.

Chris, try typing "vertical stripes for bedroom". You'll see an Alfonzo DiLauro bedroom in wine and taupe that would look great with your curtains. Too dramatic? Maybe use some of the colors.

Stunning effect for small rooms is a good idea, it will make forget the room is small! ;-)

According to this, i would paint one wall dark (black, steel grey, night blue or dark brown) and do the same with the drawer chest.
Then you can go for any headboard : neutral color fabric, plain deep red or jade green or golden fabric(this last one looks stunning on any dark wall), wood or bamboo headboard but with a simple shape if you look for a zen atmosphere , or for a statement a really oriental shape one in red or golden !

I know it seems hard, but going till the end of your ideas ( the oriental look of the curtains) will improve the curtains and the all room.
The site below could also inspire you for any colors idea and style :
http://www.pagodaroad.com/2012/01/turquoise-asian-inspired-rooms-and.html

love the Alfonso wallpaper idea and the headboard ideas from Natalie. Thankyou Judi shines and Natalie for all your help. One last Question, where is Jenovic based?

I would consider painting the outside wall black in a gloss. I really, really like the idea of grasscloth on the other walls with the trim all done in a darker neutral to tie it in. Do you actually draw the curtains or do you need something else for privacy? If you do, I would do a heavy woven wood blind, but hang it behind the curtain rod instead of inside the window - that is too pretty to cover up at all. I would make the bed pretty neutral - use texture; no more pattern. Do the same with the bedding - tone on tone. The color should come in in an accent chair (maybe painted bamboo in the accent color of your choice) and a bedspread or throw at the end of the bed. That will make it muted, make the curtains stand out but also give you some standout color.