Q: Does an "Unlocked" phone form Europa work with Movistar Nicaragua

Whether an unlocked phone will work on Movistar and whether Movistar will support the use of an unlocked phone are two completely different questions.

The same model phones are sold in Nicaragua as are sold in Europe. That doesn't mean that carriers in Nicaragua are under any obligation to support them.

If it is, you'll have to ask Movistar in Nicaragua...

I don't know what you mean by support, but I really doubt the phone could just not work.

If it helps, I used my iPhone 6S bought in Europe with Movistar Panama and Movistar Costa Rica and had no problems whatsoever. And that includes using LTE in Panama.