You've got your answer right there. If the monitor displays that message or in desktop settings it says that is the recommended resolution it means it is the highest. Witch means your monitor does not support higher resolutions. For higher resolutions you need a new monitor that can support higher resolutions. Unless there is a problem with the monitor itself. What model is it?
That's probably the correct answer, but you didn't answer his question on what monitor you have. There has been cases were the monitor was not correctly read by Windows, resulting in it's native resolution not being seen.