The East Midlands outfit went into the contest with the title challengers on the back of losing at Everton last weekend and sitting just one point above the relegation zone.
Goals from Josko Gvardiol and Erling Haaland proved to be the difference at the City Ground, securing a win for the visitors that keeps them on the coattails of leaders Arsenal.
However, Forest only went behind at a time when they were temporarily down to 10 men courtesy of an injury to Neco Williams, while they also squandered openings to match City for longer than they did.
What did Nuno have to say?
Forest have now lost three of their last four games in the top flight, drawing the other, to leave them in a three-way battle to avoid finishing in 18th or 19th place in the table.
Nevertheless, Nuno has insisted that he will take the positives from the display that his players delivered against opponents who are now unbeaten in 31 matches in all competitions.
Speaking to Sky Sports, Nuno said: "We played a good game, were compact, organised and had chances. We did a good job regarding how hard it is to play against Manchester City, and the players gave it a big go. With this attitude, we will achieve what we want.
"We are disappointed with the result, the encouragement comes from the way we work, how committed we are, and what we have ahead of us. This is more important. We stay positive and we go for the next three games.
"The performance today, and before, we are working very hard, but missing important moments also in the defensive aspect in the games and set pieces, but we are giving it a go. It is important we keep producing because we trust that the final touch will come."
Chris Wood miss the pivotal moment of the game
Shortly after City had taken the lead, Forest should have equalised through Chris Wood, who scuffed his effort off target from close range when it appeared easier to score.
Although Nuno has admitted that he expected his leading goalscorer to convert the opportunity, the Portuguese backed him to bounce back in the closing three fixtures.
Nuno added: "We could have done better. Chris is one of the best strikers in the Premier League, we trust him and he will deliver for sure."
Forest, who are expected to discover the outcome of an appeal over a four-point penalty for breaching the Premier League's Profit and Sustainability regulations next week, square off against already-relegated Sheffield United in their next match on May 4.