Diffracted Sunlight
Colourful iridescence seen over Tel-Aviv by Pennina Neumann. "I was lucky to see those beautiful iridescent clouds. I seldom get to see them and when I do it's mostly pink and green shades. Iridescent clouds aren't the most unusual thing, but even so, the presence of blue and a little of purple shades was the reason it was such a joy."
  ©Pennina Neumann, shown with permission.
Atmospheric
Optics

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Light waves reaching a small cloud water droplet are scattered in all directions mostly at the drop periphery but a few via routes through the inside. The outgoing scattered waves overlap and interfere. Where the wave crests coincide the wave is strengthened in that direction. Where the wave crests are opposite to each other the waves are cancelled and there is darkness. The result is a circular diffraction pattern a corona. It is coloured because each wavelength produces a different size corona and these add arithmetically to form the hues.

But that is only when there are millions of uniform sized droplets to form the complete pattern in the sky. When the drops vary in size from point to point in the clouds, we see instead patches here and there of different corona fragments cloud iridescence.

Most iridescence is near to the sun and is best seen with the sun shielded by a building or post. Alternatively look at the sky reflection in water or from the convex surface of dark glasses.