Rainbows are not formed, as in they’re not objects. They’re simply a trick of the light that can be seen from certain angles. Like all other simillar phenomenons, like moon halos, they form a ring and not an arch. However since we usually see them from the ground, we only see half of them, so they look like arches. It is possible to view a fully circular rainbow if you’re somewhere high or in an airplane and conditions are right. You basically see them as long as there are water droplets in the air and the sun is at the right angle, which usually means being behind you. Since water is always refracted from the droplets at the same angle, if you’re seeing a rainbow, you’re at the right spot, and if you move it will either move with you or you’ll stop seeing it. As an observer you’re always at the center of the rainbow and that’s why it’s circular.
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