As @Aditya-M-P has already mentioned you can run the following command inside your projects root directory to generate the .nvmrc to set a desired NodeJS version for you project to work properly:
node -v > .nvmrc
It will generate something like this inside your .nvmrc file:
v10.16.2
Also using 10.16.2 without the v letter will work just fine.
However, in the official documentation in the .nvmrc section it never mentions that once you get this file created, the specified node version will be loaded automatically.
So that’s not enough, you need to run the command below so that nvm can look for the .nvmrc file to load the specified version:
nvm use
Here it is a gif for demoing purpose:

To autoload the specified node version:
You need to add something else to your shell configuration depending on what you use bash or zsh
To get the exact configuration for each of them, please follow the instructions in the corresponding shell config section.
In my case I’m using zsh so I do need to add this at the end of my .zshrc file and here is the image that confirms it works like a charm:
# place this after nvm initialization!
autoload -U add-zsh-hook
load-nvmrc() {
local node_version="$(nvm version)"
local nvmrc_path="$(nvm_find_nvmrc)"
if [ -n "$nvmrc_path" ]; then
local nvmrc_node_version=$(nvm version "$(cat "${nvmrc_path}")")
if [ "$nvmrc_node_version" = "N/A" ]; then
nvm install
elif [ "$nvmrc_node_version" != "$node_version" ]; then
nvm use
fi
elif [ "$node_version" != "$(nvm version default)" ]; then
echo "Reverting to nvm default version"
nvm use default
fi
}
add-zsh-hook chpwd load-nvmrc
load-nvmrc

I hope it could be useful for anyone else facing the same question! 😎