Nicholls believes New Zealand must retain the confidence they have derived from strong test performances in the last couple of years, and set aside the "hiccup" of the Basin Reserve a few days ago.
"We're looking to move forward confidently and know that the good cricket we've been playing will translate into this game," he said.
Nicholls made his New Zealand debut in the opening ODI against Sri Lanka on Boxing Day on his home ground, Hagley Oval. Now it's his second test before his supporters.
"It's always nice to be back in your home town and with the great facility here at Hagley it's a ground that I really personally enjoy playing at.
"I know the guys in the team also enjoy playing here. It's a great facility and it's usually a good wicket."
As for coach Mike Hesson's plea for more green in the pitch at Hagley, Nicholls believes it's "something to be expected in New Zealand".
"We're known for those conditions and I've got no problem playing in them. I know it's something that we're trying to get used to. I've played out here a few times and I'm pretty comfortable with it."
Nicholls admitted the intensity from first-class to test cricket was a step up.
"But there's also a lot that goes into it, the buildup into the test, and it's against Australia so it adds that as well. I really enjoyed the step up in intensity."
That's likely to ramp up again on Saturday, considering the state of the series, the fact a New Zealand win would deny Australia top spot in the test rankings, and that it's McCullum's final match for his country.