Nudge is available only for wrapped images. Click on your image and click on
the Text Wrapping button (dog icon) on the Picture toolbar. Choose any
wrapping style other than "In Line With Text." Words cannot be nudged unless
they're wrapped WordArt.
Go to Format>Object or Format>Picture, Layout tab, check if 'In line with
text' is selected. If it is, change it to something else and then you will
be able to Nudge.
