A full circular rainbow is called a glory. NASA defines a glory an optical phenomenon that looks like small Round Rainbow of interlocking colors. A rainbow is a meteorological phenomenon that is caused by reflection, refraction and dispersion of light in water droplets resulting in a spectrum of light appearing in the sky. It takes the form of a multicolored circular arc. Rainbows caused by sunlight always appear in the section of sky directly opposite the sun.
When sunlight and raindrops combine to make a rainbow, they can make a whole circle of light in the sky. But it’s a very rare sight. Sky conditions have to be just right for this, and even if they are, the bottom part of a full circular rainbow is usually blocked by your horizon. That’s why we see rainbows not as circles, but as arcs across our sky.
Circular Rainbows Also Called Halo
There is something called as Halo which can be termed as circular rainbows as well. Halos can have many forms, ranging from colored or white rings to arcs and spots in the sky. Many of these appear near the sun or moon, but others occur elsewhere or even in the opposite part of the sky. Among the best known Halo types are the circular halos.