Step 7:

When the special effects set has loaded choose the one called ‘Russels Rainbow’ and select the Radial Gradient option. Using the Gradient tool, drag the gradient into the curve shown, then press Ctrl/Cmd + t to bring up the Free Transform tool and scale and rotate the gradient until it matches the example.

Step 8:

Rainbows are generally quite subtle by nature, so some blending may be required as well as the removal of any unwanted areas. Add a Layer Mask to the rainbow layer. Paint on the mask to hide the bottom part of the rainbow, moulding it so that it appears to emanate from the top of the water spout.

Step 9:

For added subtlety, change the rainbow layer’s blend mode to Screen and reduce the Opacity to about 67 per cent.

Step 10:

The rainbow still looks a little computer-generated. The colours are too well defined. To fix this we are going to use the Hue/Saturation command to take control over the distribution of colour. Add a Hue/Saturation layer that is clipped to the rainbow layer. The quickest way to do this is to hold the Alt key while clicking the Adjustment Layer icon at the bottom of the Layers palette. When the dialog box opens, be sure to tick the box labelled Use Previous Layer to Create Clipping Mask.