We present Hα and [OIII] (5007 Å) images of the nebula powered by the jet of the black hole candidate and microquasar Cygnus X-1, observed with the 2.5-m Isaac Newton Telescope (INT). The ring-like structure is luminous in [OIII] and there exists a thin outer shell with a high [OIII]/Hα flux ratio. This outer shell probably originates in the collisionally excited atoms close to the front of the bow shock. Its presence indicates that the gas is shock excited as opposed to photoionized, supporting the jet-powered scenario. The shock velocity was previously constrained at 20 < vs < 360 km s-1 here we show that vs >= 100 km s-1 (1σ confidence) based on a comparison of the observed [OIII]/Hα ratio in the bow shock with a number of radiative shock models. From this we further constrain the time-averaged power of the jet: PJet = (4-14) × 1036erg s-1. The Hα flux behind the shock front is typically 4 × 10-15erg s-1 cm-2 arcsec-2, and we estimate an upper limit of ~ 8 × 10-15 erg s-1 cm-2arcsec-2 (3σ) to the optical (R-band) continuum flux of the nebula. The inferred age of the structure is similar to the time Cyg X-1 has been close to a bright HII region (due to the proper motion of the binary), indicating a dense local medium is required to form the shock wave. In addition, we search a >1 deg2 field of view to the south of Cyg X-1 in Hα (provided by the INT Photometric Hα Survey of the Northern Galactic Plane; IPHAS) for evidence of the counter jet interacting with the surrounding medium. Two candidate regions are identified, whose possible association with the jet could be confirmed with follow-up observations in [SII] and deeper observations in [OIII] and radio.