Service reports that host (= other service) is not found

I have defined a nginx service in my docker compose and this service is reporting the following in the Logs:

13.03.19 22:11:08 (+0100) Restarting service ‘nginx sha256:49ee99c7b0dae66dd6692192f9f41473b32b29429ce7b80133cb91464ff6a18f’
13.03.19 22:11:08 (+0100) nginx 2019/03/13 21:11:08 [emerg] 19#19: host not found in upstream “nodered” in /etc/nginx/nginx.conf:15
13.03.19 22:11:08 (+0100) nginx nginx: [emerg] host not found in upstream “nodered” in /etc/nginx/nginx.conf:15
13.03.19 22:11:10 (+0100) Killed service ‘nginx sha256:49ee99c7b0dae66dd6692192f9f41473b32b29429ce7b80133cb91464ff6a18f’

So it seems that the host nodered is not known in the nginx container, but this is actually the name of the other service that I have defined in the docker compose file.
So I don’t understand why it is reporting the error host not found ...

It seems a similar problem as is reported in Docker Networking - nginx: [emerg] host not found in upstream - Stack Overflow

My Host OS version = balenaOS 2.29.2+rev1 (Development)

FYI The contents of my docker-compose.yml

 #networks: {}
   node-red-eq3-data: {}
     build: node-red-eq3
     privileged: true
     restart: always
     network_mode: host
        - "1880:1880"
       - 'node-red-eq3-data:/data'
       io.balena.features.kernel-modules: '1'
       io.balena.features.firmware: '1'
       io.balena.features.dbus: '1'
       io.balena.features.supervisor-api: '1'
       io.balena.features.balena-api: '1'
       io.balena.update.strategy: download-then-kill
       io.balena.update.handover-timeout: ''
     build : nginx
       - nodered
        - "80:80"
        - "443:443"
     restart: always 

The contents of my nginx Dockerfile:

COPY ./nginx.conf /etc/nginx/nginx.conf
and the contents of  my `nginx.conf` file:
events {}

http {
  server {
  listen 80;
  listen 443  ssl;
  root /usr/share/nginx/www;
  index index.html index.htm;
    # redirects <device public url> to node-red-eq3
    location / {
      proxy_pass http://nodered:1880;

The problem seems due to the following line in my docker compose yml file

So when I commented out above line, it works.

This is a bit annoying as I want to use bluetooth pairing in that container and according to the following link I need to set network_mode: host for this.